Bonus Corporation is installing a new machine at its production facility. It has incurred these costs: Purchase price (including input tax of P300,000) P2,800,000 Initial delivery and handling costs 200,000 Costs of site preparation 600,000 Consultants used for advice on the acquisition of the machine 700,000 Installation and assembly costs 500,000 Costs of testing 100,000 Costs of training employees on how to use the machine 80,000 Estimated dismantling costs to be incurred after 7 years 300,000 Operating losses before commercial production 400,000 The cost of the machine is A. 4,900,000 B. 5,200,000 C. 4,200,000 D. 4,980,000
Bonus Corporation is installing a new machine at its production facility. It has incurred these costs: Purchase price (including input tax of P300,000) P2,800,000 Initial delivery and handling costs 200,000 Costs of site preparation 600,000 Consultants used for advice on the acquisition of the machine 700,000 Installation and assembly costs 500,000 Costs of testing 100,000 Costs of training employees on how to use the machine 80,000 Estimated dismantling costs to be incurred after 7 years 300,000 Operating losses before commercial production 400,000 The cost of the machine is A. 4,900,000 B. 5,200,000 C. 4,200,000 D. 4,980,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Bonus Corporation is installing a new machine at its production facility. It has incurred these costs:
|
Purchase price (including input tax of P300,000) |
P2,800,000 |
|
Initial delivery and handling costs |
200,000 |
|
Costs of site preparation |
600,000 |
|
Consultants used for advice on the acquisition of the machine |
700,000 |
|
Installation and assembly costs |
500,000 |
|
Costs of testing |
100,000 |
|
Costs of training employees on how to use the machine |
80,000 |
|
Estimated dismantling costs to be incurred after 7 years |
300,000 |
|
Operating losses before commercial production |
400,000 |
The cost of the machine is
A. 4,900,000
B. 5,200,000
C. 4,200,000
D. 4,980,000
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