How much is the cost of the machinery? Problem 26-22 (IAA)1. The old machine, which was removed in the installation ofOn December 31, 2020, Scarce Company showed the following10% of P1,286,000 128,600account for machinery that it has assembled for own use.An analysis of the details in the account disclosed the followingCost of dismantling old machine 20,000 Cash proceeds from saleaccount for machinery that it has assembled for oweloMachineryCost of dismantling old machine 20,000 Cash proceeds from salRaw materials usedLabor in constructionCost of installationMaterials spoiled in trial runProfit on constructionPurchase of machine toolsof old machine600,000400,000 Depreciation for 202060,00030,000100,00090,00014,000the new one had been fully depreciated.2 The discount received on the payment of materials used inconstruction totaled P40,000 and this was reported in thepurchase discount account.3. The factory overhead account shows a balance of P2,500.000for the year ended December 31, 2020. This balance exceedsnormal overhead on plant activities by P150,000 andattributable to machine construction.4. A profit was recognized on construction for the differensbetween cost incurred and the price at which the machinecould have been purchased.5. Machine tools have a useful life of 3 years.6. Machinery has a useful life of 10 years and was used forproduction beginning September 1. 2020.

To calculate the cost of acquisition or self construction, IAS 16 should be referred.

Answered: How much is the cost of th

Business

Accounting

How much is the cost of th

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter7: Deductions And Losses: Certain Business Expenses And Losses

Section: Chapter Questions

Problem 40P

See similar textbooks

Related questions

Q: What is equivalent production? Explain in terms of its effect on computed unit costs.

A: Process costing: It is a type of costing method, where the direct costs are accumulated and indirect…

Q: What are life-cycle costs? How do these costs relate to the production life cycle?

A: Life cycle cost is the summation of all costs related to a product, structure, system, or service…

Q: Conversion costs are: A. direct material, direct labor, and manufacturing overhead. B. direct…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: a. what is the amount of prime costs? b. what is the amount of conversion costs?

A: Prime cost is the total direct cost incurred to manufacture a product or render a service typically…

Q: Which one of the following is a fixed cost? a. Raw material costs b. Salary with commission c.…

A: A fixed cost is one that does not adjust in the short term, even though a company's sales volume or…

Q: Conversion costs include A. product and period costs B. direct labor and manufacturing overhead…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: What is another name for total manufacturing cost??

A: The total manufacturing cost is the total expense incurred by a firm for production of the goods…

Q: present. What is the cost of direct material used?

A: Direct material used = Opening Stock + Raw materials purchased - Closing Stock

Q: How does the unit cost of producing an item depend on the total quantity of items that have been…

A: Unit cost is the cost of producing per unit. Unit cost includes both variable and fixed cost that…

Q: What are the Nonmanufacturing costs?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Conversion costs are direct materials plus direct labor. direct labor plus manufacturing overhead.…

A: Conversion Cost: Conversion cost can be defined as the summation of manufacturing overhead and…

Q: What is the equivalent production units of materials? What is the equivalent production units of…

A: Inventory refers to the stock that is held by the company or is not sold yet which is expected to be…

Q: What is a manual factoring cost

A: A type of financial transaction in which a business sells its account receivables to a third party…

Q: How much is the cost of goods manufactured?

A: Cost of goods manufactured in the business shows total costs incurred in manufacture and production…

Q: The total cost of work in process, end is?

A: Equivalent units concept is used when opening or ending work in progress is not 100% complete but…

Q: what is the total cost of ?goods manufactured

A: Cost of goods manufactured = Beginning Work in progress + Manufacturing costs incurred - Ending work…

Q: How to calculate manufacturing costs

A: How to calculate manufacturing costs.

Q: Which of the following is an example of a cost that varies in proportion to changes in the activity…

A: Packaging costs is the variable cost which varies with the total output. It will increase with the…

Q: How do you compute the cost of goods manufactured?

A: Cost of goods manufactured is the total amount of expense incurred in order to convert work in…

Q: Calculate the total absorbtion rate used to apportion manufacturing overhead by?

A: The absorption rate is assigned according to the various allocation grounds. Hours of direct work…

Q: What are the arguments in favor of treating fixed manufacturing overhead costs as period costs?

A: Period costs: Period costs are the costs other than the product costs. These costs are not incurred…

Q: what is production cost? what is tangible assets? what is operating expenses? what is cost of goods…

A: Expenses are those costs which are required to be incurred by the company to smoothly run the…

Q: What are the arguments in favor of treating fixed manufacturing overhead costs as product costs?

A: Following are the arguments in treating fixed manufacturing overhead costs as product costs: For…

Q: Determine the following is best described as a fixed, variable, or mixed cost with respectto product…

A: Variable Cost: The cost which changes with the change in level of activity is called a variable…

Q: Determine the cost of the machine.

A: It is pertinent to note that as per IAS 16 all the costs that are incurred for an asset in order to…

Q: What is the cost of the building? What is the cost of machinery and equipment?

A: Capitalisation of fixed assets means how much cost incurred for the acquisition of long term fixed…

Q: do you determine the production

Q: How are costs assumed to flow through the manufacturing process?

A: The costs incurred during manufacturing process are said to be manufacturing cost.

Q: The summation of all costs related to a product, structure, system, or service during its life span…

A: Hello, I am only answering first question as per the policy and if you want other to be answered…

Q: How does time and motion study works? How could this method or process quantify the labor standard…

A: Cost accounting: Cost accounting is the process of classifying, recording, analyzing and…

Q: Prime cost is? A)Group of answer choices B)indirect materials cost and direct labor cost.…

A: Prime cost refers to the cost related to direct labour and direct material For example in the…

Q: How is the cost of units normally lost reflected in the manufacturing cost for the period?

A: Cost: Cost can be defined as the cash and cash equivalent which is incurred against the products…

Q: How is conversion costs per equivalent unit calculated?

A: The cost per unit is calculated as total cost divided by number of units.

Q: 1.Based on the data above. What is the total conversion cost? 2.Based on the data above. What is…

A: Cost accounting means where every cost of doing business is recorded in necessary account and cost…

Q: How is the cost per equivalent unit of production calculated?

Q: Calculate : a) Cost of raw materials consumed. b) Total cost of production. c) Cost of goods sold.

A: Hi student, Since there are multiple subparts in the question, we will answer only first three…

Q: If FIFO Method is used, the costs of goods manufactured amounted to:

A: Equivalent units means where the some goods remain incomplete at the end of process and we need to…

Q: Why is the cost of idle time treated as manufacturing overhead?

Q: how much is the cost of goods manufactured?

A: Cost of goods manufactured shows total costs incurred on production and manufacturing of goods in…

Q: .What is the amount of cost of goods manufactured

A: We are given abstract of few accounts from the books of Sharp Manufacturing. Sharp Manufacturing…

Q: What amount should be reported as cost of goods manufactured?

A: Cost of Goods Manufactured :— It is the total cost incurred during manufacturing of the finished…

Q: How do you compute the unit varible cost for an item in manufacturing?

A: Variable costs: Variable costs are costs that vary in direct proportion with changes in production…

Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

How much is the cost of the machinery?

Problem 26-22 (IAA)
1. The old machine, which was removed in the installation of
On December 31, 2020, Scarce Company showed the following
10% of P1,286,000 128,600
account for machinery that it has assembled for own use.
An analysis of the details in the account disclosed the following
Cost of dismantling old machine 20,000 Cash proceeds from sale
account for machinery that it has assembled for owelo
Machinery
Cost of dismantling old machine 20,000 Cash proceeds from sal
Raw materials used
Labor in construction
Cost of installation
Materials spoiled in trial run
Profit on construction
Purchase of machine tools
of old machine
600,000
400,000 Depreciation for 2020
60,000
30,000
100,000
90,000
14,000
the new one had been fully depreciated.
2 The discount received on the payment of materials used in
construction totaled P40,000 and this was reported in the
purchase discount account.
3. The factory overhead account shows a balance of P2,500.000
for the year ended December 31, 2020. This balance exceeds
normal overhead on plant activities by P150,000 and
attributable to machine construction.
4. A profit was recognized on construction for the differens
between cost incurred and the price at which the machine
could have been purchased.
5. Machine tools have a useful life of 3 years.
6. Machinery has a useful life of 10 years and was used for
production beginning September 1. 2020.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

14. On March 2, 2021, HABIBIYUCK bought an equipment costing P1,200,000. It is the Company’s policy to depreciate long-lived assets using the double declining balance. The equipment had a useful life of 10 years. How much is the carrying value of the above asset at December 31, 2023?
24.The Danica Company self constructed an asset for its own use. Construction started on January 1, 2021 and the asset was completed on October 31, 2021. Costs incurred during the period of construction were as follows:January 1-P400,000 April 1-P500,000 August 1-P480,000October 1-P180,000 At the beginning of the year, the company obtained a two-year, 18% loan of P500,000, specifically to finance the asset construction. In addition to the specific borrowing, prior to the construction, Danica Company had a general borrowing amounting to P600,000 with interest of 15% and a five-year term that was used in part in the self construction.What is the total cost of the self constructed asset? a. 1,686,500 b. 1,711,800 c. 1,728,000 d. 1,770,000
Po34. Coronado Landscaping Limited has determined that its lawn maintenance division is a cash-generating unit under IFRSThe carrying amounts of the division's assets at December 31, 2023, are as follows : Land $27,000 Building56,000 Equipment36,000 Vehicles19,000 $138,000 The lawn maintenance division has been assessed for impairment and it is determined that the division's value in use is $124,200, fair value less costs to sell is $93,000 , and undiscounted future net cash flows are $162,000.
7. On January 1, 2020 Gingerbread, Corp. purchased a reindeer merry-go-round as an attraction to draw customers during the holiday season. The following information is available: Invoice price $280,000 Shipping cost $4,000 Set-up cost $2,000 Insurance to cover years 2020 and 2021 $12,000 Necessary repair during set-up 500 Determine the amount to be record as the capitalized cost of the asset. a.286,000 b.280,000 c.286,500 d.298,500