What is the initial cost of the machine? And why? a. 2,000,000 b. 2,400,000 c. 2,050,000 d. 2,450,000
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- Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of $1,200, paid installation fees of $2,750, pays annual maintenance cost of $250, and received a 10% discount on sales price. Determine the acquisition cost of the equipment.Janrel Company entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P2,000,000 was paid as follows: down payment, P400,000, note payable in 3 equal annual installments, P1,200,000, 20,000 ordinary shares with a par value of P25,000 and fair value of P40 per share, P800,000. Prior to the machine’s use, installation cost of P50,000 was incurred. The machine has an estimated residual value of P100,000. What is the initial cost of the machine?In January, Hunter Corporation entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P300,000, was paid for as follows: Down payment .......................................... P 30,000 Note payable in 10 equal monthly installments ......... 240,000 1,000 shares of Hunter common stock with an agreed value of P50 per share .............................. 50,000 Total ................................................. P320,000 Your audit disclosed that prior to the machine's use, installation costs of P8,000 were incurred. The machine has an estimated useful life of ten years and an estimated salvage value of P10,000. As auditor of the corporation, what should Hunter record as depreciation expense for the first year under the straight-line method? Select one: a. P30,000 b. P31,000 c. P29,800 d. P31,800
- ABC Corp entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P2,000,000 was paid as follows: Down payment P 400,000 Note payable in 3 equal annual installments 1,200,000 20,000 shares of ABC, fair value of P40 per share 800,000 TOTAL 2,400,000 Prior to the machine’s use, installation cost of P50,000 was incurred. The machine has a residual value of P100,000. required: What is the cost of the machine for financial reporting purposes?On January 1, 2020, ABC Co. entered into a contract to acquire a newmachine for its factory. The machine, which had a cash price of $300,000,was paid for as follows: Down payment $30,000; Note payable in 10 equalmonthly installments $240,000; 1,000 shares of Banana Co. ordinaryshares with an agreed value of $50 per share: $50,000 Total $320,000.Prior to the machine's use, installation costs of $8,000 were incurred. Themachine has an estimated useful life of 10 years and salvage value of$10,000. What should the company record as depreciation expense forthe first year under the straight line method?On January 1, 2020, Banana Co. entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P300,000, was paid for as follows: Down payment P30,000; Note payable in 10 equal monthly installments P240,000; 1,000 shares of Banana Co. ordinary shares with an agreed value of P50 per share: P50,000 Total P320,000. Prior to the machine's use, installation costs of P8,000 were incurred. The machine has an estimated useful life of 10 years and salvage value of P10,000. What should the company record as depreciation expense for the first year under the straight line method?
- In January 2022, Utah Corporation entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P2,000,000, was paid for as follows: Down payment 300,0005,000 ordinary shares of Utah with an agreed-upon value of P370 per share 1,850,0002,150,000Prior to the machine’s use, installation costs of P70,000 were incurred. The machine has an estimated useful life of 10 years and an estimated salvage value of P100,000. The straight line method of depreciation is used. The depreciation to be recognized in 2022 isOn January 1, 2020, Ferdie Company entered into a contract to acquire a new machine for its factory. The machine, which has a cash price of P295,000, was paid for as follows: Down payment P80,000 6% Notes payable (payable in four equal annual payments starting December 31, 2020) 200,000 500 ordinary shares of Gemrey Co. P100 par with a market value of P110. 50,000 At what amount should Ferdie initially measure its machine?Ebasan Compary acquired a new machine with an invoice cost of P1,600,000, Ebasan incurred transportation cost P50,000 and installation cost P140,000. The terms of the acquisition include a 5% discount if payment is made in 10 days. The entity paid beyond the discount period. The entity's chief engineer with monthly salary of P60,000 spent two-thirds of his time during trial run of the new machine. The entity requested an allowance from the supplier because the machine proved to be of less than standard performance capability. The supplier granted a cash allowance of P100,000. The cost of removing on aid machine before the new machine was installed amounted to P10,000. The operator of the old machine who was laid off due to the acquisition of the new machine was paid a gratuity of P30,000. What amount should Ebasan record as cost of the new machine?
- A new machine was acquired on July 31, 2022 by Harian Company with the following considerations: Down-payment 1,000,000 Total par value of 5,000 ordinary shares issued (FV is P140) 600,000 Notes payable in three equal annual installment every July 31, starting 2023 (3 years non-interest bearing; effective rate on this date 9%) 900,000 Estimated dismantling after five (5) year life of the machine (at 9% effective rate) 100,000 What is the initial cost of the machine on July 31, 2022?Bilmoco Company purchased a new machine on a deferred payment basis. A down-payment of P100,000 was made and 4 monthly installments of P250,000 are to be made at the end of each month. The cash equivalent price of the machine was P950,000. The entity incurred and paid installation costs amounting to P30,000. What is the amount to be capitalized as cost of the machine?Tourmalet sold an item of plant for $50 million on 1 April 20X4. The plant had a carrying amount of $40 million at the date of sale, which was charged to cost of sales. On the same date, Tourmalet entered into an agreement to lease back the plant for the next five years (being the estimated remaining life of the plant) at a cost of $14 million per annum payable annually in arrears. An arrangement of this type is normally deemed to have a financing cost of 10% per annum. What amount will be shown as income from this transaction in the statement of profit or loss for the year ended 30 September 20X4?