In January 2022, Utah Corporation 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 for as follows: Down payment 300,000 5,000 ordinary shares of Utah with an agreed-upon value of P370 per share 1,850,000 2,150,000Prior to the machine’s use, installation costs of P70,000 were incurred. The machine has an estimated useful life of 10 years and an estimated salvage value of P100,000. The straight line method of depreciation is used. The depreciation to be recognized in 2022 is
In January 2022, Utah Corporation 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 for as follows: Down payment 300,000 5,000 ordinary shares of Utah with an agreed-upon value of P370 per share 1,850,000 2,150,000Prior to the machine’s use, installation costs of P70,000 were incurred. The machine has an estimated useful life of 10 years and an estimated salvage value of P100,000. The straight line method of depreciation is used. The depreciation to be recognized in 2022 is
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In January 2022, Utah Corporation 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 for as follows:
Down payment 300,000
5,000 ordinary shares of Utah with an agreed-upon value of P370 per share 1,850,000
2,150,000Prior to the machine’s use, installation costs of P70,000 were incurred. The machine has an estimated
useful life of 10 years and an estimated salvage value of P100,000. The
is used. The depreciation to be recognized in 2022 is
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