The Kimchi Company imported a new machine at a peso equivalent of P1,320,000. The company has to pay additional cost of importing the asset such as P40,000 import duties and P60,000 non-refundable purchase taxes. Costs of transporting the asset was P20,000 and cost of preparing the asset for its intended use include P12,000 installation and P8,000 testing and trial run costs. How much is the initial cost of the new machine

The Kimchi Company imported a new machine at a peso equivalent of P1,320,000. The company has to pay additional cost of importing the asset such as P40,000 import duties and P60,000 non-refundable purchase taxes. Costs of transporting the asset was P20,000 and cost of preparing the asset for its intended use include P12,000 installation and P8,000 testing and trial run costs. How much is the initial cost of the new machine

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 4RE: Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000...

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Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?
The Kimchi Company imported a new machine at a peso equivalent of P1,320,000. The company has to pay additional cost of importing the asset such as P40,000 import duties and P60,000 non-refundable purchase taxes. Costs of transporting the asset was P20,000 and cost of preparing the asset for its intended use include P12,000 installation and P8,000 testing and trial run costs. How much is the initial cost of the new machine?Required to answer. Single choice.
The ML Company imported a new machine at a peso equivalent of $1,320,000. The company has to pay additional cost of importing the asset such as $40,000 import duties and $60,000 non-refundable purchase taxes. Costs of transporting the asset was $20,000 and cost of preparing the asset for its intended use include $12,000 installation and $8,000 testing and trial run costs. How much is the initial cost of the new machine?
A processing plant consumed 650,000 kW of electric energy annually and pays an average of P6.50 per kWh. Astudy is being made to generate its own power to supply the plant the energy required, and that the power plant installed would cost P6,500,000. Annual operation and maintenance, P1,230,000. Other expenses P305,000 per year. Life of power plant is 16 years; salvage value at the end of life is P550,000; annual taxes and insurances, 6.5% of first cost; and rate of interest is 20%. Using the sinking fund method for depreciation, determine if the power plant is justifiable.
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The MGC Company has a contract with a hauler to transport its naptha requirements of 3,600,000 liter per year from a refinery in Batangas to its site in Paco at a cost of P1.05 per liter. It is proposed that the company buys a tanker with a capacity of 18,000 liters to service its requirements at a first cost of P 8,000,000 life is 6 years and a salvage value of P 800,000. Other expenses are as follows: a.) Diesel fuel at P7.95 per liter and the tanker consumers 120 liter per round trip from Paco to Batangas and back.b.) Lubricating oil servicing is P3,200 per month.c.) Labor including overtime and fringe benefits for one driver and one helper is P21,000 per month.d.) Annual taxes and insurance. 5% of first cost.e.) General maintenance per year is P40,000f.) Tires cost P 32,000 per set and will be renewed every 150 round trips. What should the MGC Company do if a 5% interest rate on investment is included in the analysis?
On 1-March-2010, Alpha Pharmaceuticals Ltd. purchased 10 machines for manufacturing tablets. The price of each machine is $150,000. The transportation and installation cost is 1% and 2.5% of the price respectively for each machine. The company also had to bear the cost of test runs for each machine, which were $1,500. The approximate repair and maintenance expense for each machine is $4,000 per year. The company paid 25% of price in cash and signed a 6 month, Notes Payable (N/P) for the remaining balance. The N/P bears interest expense for the company at 5% per annum. Each machine is useful for 5 years and experts estimate that each machine can be sold at the end of its useful life for 10% of its purchase price.During its useful life, the machine will produce 7,500,000 tablets. Following table shows number of tablets produced in each year. Please note that the company’s fiscal year ends on 30th June. year unit produced 1 2,500,000 2 1,700,000 3 1,400,000 4 1,200,000 5…
Araneta Forwarders, Inc. is planning to purchase a new delivery vehicle costing P500,000. Test run expenses amount to P5,000. The old vehicle which will be replaced will have a traded-in value of P200,000. Other assets that are to be retired as a result of the acquisition of the new vehicle can be salvaged and sold for P130,000. The retirement of these other assets will result to a gain of P10,000 which will increase income taxes by P3,200. If the new vehicle is not purchased, extensive repairs on the old vehicle will have to be made at an estimated cost of P12,000. If the new vehicle will be purchased, a set of refrigeration cooling system with a market value of P100,000 will have to be installed to make the new vehicle operational. The refrigeration cooling system is currently idle. As well, additional gross working capital of P24,000 will be needed to support operations planned with the new vehicle. How much is the net investment? a. P332640b. P334,960c. P324,960d. P339,040
The DN Company, which engages in the fabrication of automobile engine part withproduction capacity of 700,000 units per year, is only operating at 65% capacity dueto unavailability of the necessary foreign currency to finance the importation of theirraw materials. The current annual income is P450,000; annual fixed costs are P190,000and variable cost are P0.35 per unit. the current profit/loss? thebreakeven point in units and in pesos? C) Draw the breakeven chart.
A printing machine is bought at P 1.5 million and is estimated to have a salvage value of P100,000 after 500,000 copies. The annual cost of renting the space for the business is P80,000, power cost per copy is P1.50, and maintenance and paper cost per copy is P5.00. The expected annual production of the machine is 100,000 copies. Annual interest is 12%. Determine: a. The annual operation and maintenace cost of the machine b. The annual depreciation of the machine. c. Production cost per copy.
A printing machine is bought at P 1.3 million and is estimated to have a salvage value of P100,000 after 500,000 copies. The annual cost of renting the space for the business is P80,000, power cost per copy is P1.50, and maintenance and paper cost per copy is P5.00. The expected annual production of the machine is 100,000 copies. Annual interest is 12%. Determine: a. The annual operation and maintenace cost of the machine b. The annual depreciation of the machine. c. Production cost per copy. Show your solution