An entity acquired a machine and incurred the following costs: Cash paid for machine, including VAT of 896,000 96,000 Cost of transporting machine 30,000 Cost of installation 50,000 Cost of testing machine 40,000 Cost of safety rails and platform surrounding 60,000 machine Cost of water device to keep machine cool 80,000 Cost of adjustment to machine to make it 75,000 operate more efficiently Cost of repairing damage during installation 45,000 Cost of spare parts to cover breakdowns 155,000 Estimated dismantling cost to be incurred as 65,000 required by contract Insurance cost for the current year 15,000 Cost of training personnel who will use the 25,000 machine What total amount should be capitalized as cost of the machine?

An entity acquired a machine and incurred the following costs: Cash paid for machine, including VAT of 896,000 96,000 Cost of transporting machine 30,000 Cost of installation 50,000 Cost of testing machine 40,000 Cost of safety rails and platform surrounding 60,000 machine Cost of water device to keep machine cool 80,000 Cost of adjustment to machine to make it 75,000 operate more efficiently Cost of repairing damage during installation 45,000 Cost of spare parts to cover breakdowns 155,000 Estimated dismantling cost to be incurred as 65,000 required by contract Insurance cost for the current year 15,000 Cost of training personnel who will use the 25,000 machine What total amount should be capitalized as cost of the machine?

Name: An entity acquired a machine and incurred the following costs:Cash pa
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Description: An entity acquired a machine and incurred the following costs:Cash paid for machine, including VAT of896,00096,000Cost of transporting machineCost of installation30,00050,000Cost of testing machine40,000Cost of safety rails and platform surrounding6

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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