Grant Company has acquired a machine and equipment on January 2, 2018.The cost of the machine (including installation cost and decommissioningcost), P80,000,000 and the cost of the equipment is P20,000,000. Themachine produces chemical products that are sold to overseas customers. Asa condition to operate the machine, regular inspection for faults is performedevery year at a cost of P1,000,000. The life of the machine is 10 years whilethe equipment 5 years. The company uses the straight-line method ofdepreciation. On January 1, 2021, a cost was incurred to overhaul themachine at a cost of P4,000,000. After the overhaul, the machine is expectedto produced twice as it was producing in the prior years. Also, a residual valueof P1,200,000 is expected on this machine.What is the total carrying value of the manufacturing plant (machine, andequipment) as of December 31, 2021?

Calculation of Depreciation 1. MACHINE Depreciation on Machinery = cost-residual value / useful…

Answered: Grant Company has acquired a machine…

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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