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On August 1, 2017, Sheridan Company purchased a new machine on a deferred payment basis. A down payment of $3900 was made and 4 annual
On August 1, 2017, Sheridan Company purchased a new machine on a deferred payment basis. A down payment of $3900 was made and 4 annual installments of $23400 each are to be made beginning on September 1, 2017. The cash equivalent price of the machine was $87000. Due to an employee strike, Sheridan could not install the machine immediately, and thus incurred $1200 of storage costs. Costs of installation (excluding the storage costs) amounted to $2700. The amount to be capitalized as the cost of the machine is $89700. $90900. $98700. $87000.
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