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Financial Accounting

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Determining Cost:Capitalized Amount for Machine

FINACT-WTHVFR

Blue Bird Company purchased a machine for \$10,000. They must also pay \$500 for shipping and another \$1,000 to install the machine in the company’s warehouse. The vendor from whom Blue Bird purchased the machine offers a sales discount of $200 if the machine is paid for within 10 days. If Blue Bird Company pays for the machine within 5 days, what is the amount that will be capitalized on the company’s Balance Sheet?