Question 2 Daniel Manufacturing Limited (DML) purchased a large lathe. The invoice cost of the lathe was $8,200,000 but DML was able to get the price reduced to $5,800,000. The seller provided terms whereby if the entire amount was paid within 30 days a further discount of 3% was available. DML paid on the 25th day. Transportation of the machine cost DML $70,000. Insurance while in transit was $30,000. To encourage DML to purchase another machine, the manufacturer gave DML a $50,000 discount voucher on its next purchase of a similar machine. Workers were paid $45,000 install the machine. Start-up and testing costs were $45,000. Unfortunately, during the installation, one of the workers accidentally damaged the machine, and it cost $15.000 to repair the damage. Non-refundable sales taxes paid were $700,000, however, later a sales tax rebate of $80,000 was received relating to this transaction. During installation, part of the plant had to be shut down; lost profit from the shutdown was $100.000. Required: For each expenditure, identify whether it should be included in the cost of the lathe or expensed. Briefly justify each of your responses Answer Jitem Include In coat of lathe Expense Justification Es discount Freight in Insurance Voucher Installatie Testing Pamages Sales Tax Shutdown Total cost