12. Alvin Company acquired a machine and incurred the following costs:Cash paid for machine, including VAT of P96,000Cost of transporting machineCost of installation896,00030,00050,000Cost of testing machineCost of safety rails and platform surrounding machineCost of water device to keep machine coolCost of adjustment to machine to make it operate more efficientlyCost of repairing damage during installationCost of spare parts to cover breakdownsEstimated dismantling cost to be incurred as required by contractInsurance cost for the current yearCost of training personnel who will use the machineWhat total amount should be capitalized as cost of the machine?40,00060,00080,00075,00045,000155,00065,00015,00025,000A. 1,400,000B. 1,296,000C. 1,200,000D. 1,160,000

In order to compute capitalized cost of machine, All cost which are directly related bringing the…

ash paid for machine, including VAT of P96,000 ost of transporting machine ost of installation ost of testing machine ost of safety rails and platform surrounding machine ost of water device to keep machine cool ost of adjustment to machine to make it operate more efficiently ost of repairing damage during installation ost of spare parts to cover breakdowns stimated dismantling cost to be incurred as required by contract nsurance cost for the current year ost of training personnel who will use the machine Vhat total amount should be capitalized as cost of the machine? . 1,400,000 - 1,296,000 . 1,200,000 . 1,160,000 896,000 30,000 50,000 40,000 60,000 80,000 75,000 45,000 155,000 65,000 15,000 25,000

ash paid for machine, including VAT of P96,000 ost of transporting machine ost of installation ost of testing machine ost of safety rails and platform surrounding machine ost of water device to keep machine cool ost of adjustment to machine to make it operate more efficiently ost of repairing damage during installation ost of spare parts to cover breakdowns stimated dismantling cost to be incurred as required by contract nsurance cost for the current year ost of training personnel who will use the machine Vhat total amount should be capitalized as cost of the machine? . 1,400,000 - 1,296,000 . 1,200,000 . 1,160,000 896,000 30,000 50,000 40,000 60,000 80,000 75,000 45,000 155,000 65,000 15,000 25,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4PB: During the current year, Arkells Inc. made the following expenditures relating to plant machinery. ...

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