The Machine Shop, Inc. bought three machines for $17,000 and spent $3,000 shipping them to the shop. When they got to the shop, Machine A was found to be almost worthless, and was sold for $1,000 scrap. Machine B was worth $6,000 and Machine C was worth $3,000. When The Machine Shop, Inc. recorded the purchase, at what price were the three machines recorded?

Exam content for CLEP Financial Accounting exam, which covers the basics of introductory financial accounting course: General Topics (20%–30%) Generally accepted accounting principles Rules of double-entry accounting/transaction analysis/accounting equation The accounting cycle Business ethics Purpose of, presentation of, and relationships between financial statements Forms of business The Income Statement (20%–30%) Presentation format issues Recognition of revenue and expenses Cost of goods sold Irregular items (e.g., discontinued operations, extraordinary items,... Show more

Exam content for CLEP Financial Accounting exam, which covers the basics of introductory financial accounting course:

General Topics (20%–30%)
Generally accepted accounting principles
Rules of double-entry accounting/transaction analysis/accounting equation
The accounting cycle
Business ethics
Purpose of, presentation of, and relationships between financial statements
Forms of business

The Income Statement (20%–30%)
Presentation format issues
Recognition of revenue and expenses
Cost of goods sold
Irregular items (e.g., discontinued operations, extraordinary items, etc.)
Profitability analysis

The Balance Sheet (30%–40%)
Cash and internal controls
Valuation of accounts and notes receivable (including bad debts)
Valuation of inventories
Acquisition and disposal of long-term assets
Depreciation/amortization/depletion
Intangible assets (e.g., patents, goodwill, etc.)
Accounts and notes payable
Long-term liabilities (e.g., bonds payable)
Owner's equity
Preferred and common stock
Retained earnings
Liquidity, solvency, and activity analysis

Statement of Cash Flows (5%–10%)
Indirect method
Cash flow analysis
Operating, financing, and investing activities

Miscellaneous (Less than 5%)
Investments
Contingent liabilities

 

Related test: CLEP Financial Accounting Exam Practice Test 1

Show less