Grey Company acquired a machine with a cash price of P2,000,000. Down payment Note payable in 3 equal annual installments 20,000 shares of Grey Company at fair value 400,000 1,200,000 800,000 Prior to use, installation cost of P50,000 was incurred. The machine has a residual value of P100,000. What is the initial measurement of thė new machine? a. 2,000,000 b. 2,400,000 c. 2,050,000 d. 2,450,000

Grey Company acquired a machine with a cash price of P2,000,000. Down payment Note payable in 3 equal annual installments 20,000 shares of Grey Company at fair value 400,000 1,200,000 800,000 Prior to use, installation cost of P50,000 was incurred. The machine has a residual value of P100,000. What is the initial measurement of thė new machine? a. 2,000,000 b. 2,400,000 c. 2,050,000 d. 2,450,000

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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1666
A new machine was bought for $8,500 with a life of eight years and no salvage value. Its annual operating costs were as follows: $7,000, $7,210, 7426.30, ..., $8,609.12 If the MARR=12%, what was the annual equivalent cost of the machine? Choose the correct answer below. A. The annual equivalent cost of the machine was $16,656. B. The annual equivalent cost of the machine was $6,622. C. The annual equivalent cost of the machine was $1,711. D. The annual equivalent cost of the machine was $7,646. E. The annual equivalent cost of the machine was $9,357.
A machine shop purchased 10 years ago a milling machine for P65,000. A straight-line depreciation reserve had been provided on a 21-year life of the machine. The owner of the machine shop desires to replace the old milling machine with a modern unit of many advantages costing P110,000. It can sell the old unit for P25,000. How much new capital will be required for the purchase? a.Php64,047.619 b.Php80,047.619 c.Php75,047.619 d.Php90,047.619
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am. 214.
A3
Janrel Company entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P2,000,000 was paid as follows: down payment, P400,000, note payable in 3 equal annual installments, P1,200,000, 20,000 ordinary shares with a par value of P25,000 and fair value of P40 per share, P800,00O. Prior to the machine's use, installation cost of P50,000 was incurred. The machine has an estimated residual value of P100,000. What is the initial cost of the machine?
A machine costing P120,000, with accumulated depreciation of P95,000, with a fair market value of P27,500, was exchanged for a new machine with a fair value of P135,000 and the proper amount of cash is paid. The exchange has commercial substance. The new machine is to be recorded at what amount?
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A machine shop purchased 10 years ago a milling machine for P65,000. A straight-line depreciation reserve had been provided on a 21-year life of the machine. The owner of the machine shop desires to replace the old milling machine with a modern unit of many advantages costing P110,000. It can sell the old unit for P25,000. How much new capital will be required for the purchase? a.Php 64,047.619 b.Php 75,047.619 c.Php 80,047.619 d.Php 90,047.619
Freeman Corporation bought a piece of machinery. Selected data is presented below: Useful life 6 years Yearly net cash inflow P45,000 Salvage value - 0 - Internal rate of return 18% Cost of capital 15% 38. The payback period is