During the audit of Company XYZ, John Doe, the plant manager tells you that the company purchased and an equipment at the beginning of the year that is currently being used in the factory.  The equipment was recorded at cost.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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During the audit of Company XYZ, John Doe, the plant manager tells you that the company purchased and an equipment at the beginning of the year that is currently being used in the factory.  The equipment was recorded at cost.

The manager asks you, now that we are using the machine in our production do we need to any additional accounting for the machine?

 

Using the related GAAP and prepare a memo to the president that summarizes how to record, and the machine used in the factory.

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