A new machine was acquired on July 31, 2022 by Harian Company with the following considerations:Down-payment1,000,000Total par value of 5,000 ordinary shares issued (FV is P140)600,000Notes payable in three equal annual installment every July 31, starting 2023 (3 years non-interest bearing; effective rate on this date 9%)900,000Estimated dismantling after five (5) year life of the machine (at 9% effective rate)100,000What is the initial cost of the machine on July 31, 2022?P2,524,380P2,582,291P2,459,958P2,611,388

Cost of machine means the purchase price of machine including installation cost , non refundable…

Answered: A new machine was acquired on July 31,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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?

P2,524,380

P2,582,291

P2,459,958

P2,611,388

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