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How much is the cost of th

How much is the cost of th

FINANCIAL ACCOUNTING
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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How much is the cost of the machinery? 

Problem 26-22 (IAA) 1. The old machine, which was removed in the installation of On December 31, 2020, Scarce Company showed the following 10% of P1,286,000 128,600 account for machinery that it has assembled for own use. An analysis of the details in the account disclosed the following Cost of dismantling old machine 20,000 Cash proceeds from sale account for machinery that it has assembled for owelo Machinery Cost of dismantling old machine 20,000 Cash proceeds from sal Raw materials used Labor in construction Cost of installation Materials spoiled in trial run Profit on construction Purchase of machine tools of old machine 600,000 400,000 Depreciation for 2020 60,000 30,000 100,000 90,000 14,000 the new one had been fully depreciated. 2 The discount received on the payment of materials used in construction totaled P40,000 and this was reported in the purchase discount account. 3. The factory overhead account shows a balance of P2,500.000 for the year ended December 31, 2020. This balance exceeds normal overhead on plant activities by P150,000 and attributable to machine construction. 4. A profit was recognized on construction for the differens between cost incurred and the price at which the machine could have been purchased. 5. Machine tools have a useful life of 3 years. 6. Machinery has a useful life of 10 years and was used for production beginning September 1. 2020.
Transcribed Image Text:Problem 26-22 (IAA) 1. The old machine, which was removed in the installation of On December 31, 2020, Scarce Company showed the following 10% of P1,286,000 128,600 account for machinery that it has assembled for own use. An analysis of the details in the account disclosed the following Cost of dismantling old machine 20,000 Cash proceeds from sale account for machinery that it has assembled for owelo Machinery Cost of dismantling old machine 20,000 Cash proceeds from sal Raw materials used Labor in construction Cost of installation Materials spoiled in trial run Profit on construction Purchase of machine tools of old machine 600,000 400,000 Depreciation for 2020 60,000 30,000 100,000 90,000 14,000 the new one had been fully depreciated. 2 The discount received on the payment of materials used in construction totaled P40,000 and this was reported in the purchase discount account. 3. The factory overhead account shows a balance of P2,500.000 for the year ended December 31, 2020. This balance exceeds normal overhead on plant activities by P150,000 and attributable to machine construction. 4. A profit was recognized on construction for the differens between cost incurred and the price at which the machine could have been purchased. 5. Machine tools have a useful life of 3 years. 6. Machinery has a useful life of 10 years and was used for production beginning September 1. 2020.
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