How much should be recognized as cost of the new machine? ₱ 1,993,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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How much should be recognized as cost of the new machine?

₱ 1,993,000

₱ 1,930,000

₱ 1,985,000

₱ 2,025,000

Invoice price of machinery
2,000,000
Cash discount not taken
40,000
Freight on new machine
10,000
Cost of removing the old machine
12,000
Loss on disposal of the old machine
Gratuity paid to operator of the old machine who
was laid off
150,000
70,000
Installation cost of new machine
60,000
Repair cost of new machine damaged in the
process of installation
Testing costs before machine was put into regular
8,000
operation
15,000
Salary of engineer for the duration of the trial run
40,000
Operating cost during first month of regular use
Cash allowance granted because the new machine
proved to be of inferior quality
250,000
100,000
Transcribed Image Text:Invoice price of machinery 2,000,000 Cash discount not taken 40,000 Freight on new machine 10,000 Cost of removing the old machine 12,000 Loss on disposal of the old machine Gratuity paid to operator of the old machine who was laid off 150,000 70,000 Installation cost of new machine 60,000 Repair cost of new machine damaged in the process of installation Testing costs before machine was put into regular 8,000 operation 15,000 Salary of engineer for the duration of the trial run 40,000 Operating cost during first month of regular use Cash allowance granted because the new machine proved to be of inferior quality 250,000 100,000
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