In January, Hunter Corporation entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P300,000, was paid for as follows: Down payment .......................................... P 30,000 Note payable in 10 equal monthly installments ......... 240,000 1,000 shares of Hunter common stock with an agreed value of P50 per share .............................. 50,000 Total ................................................. P320,000 Your audit disclosed that prior to the machine's use, installation costs of P8,000 were incurred. The machine has an estimated useful life of ten years and an estimated salvage value of P10,000. As auditor of the corporation, what should Hunter record as depreciation expense for the first year under the straight-line method? Select one: a. P30,000 b. P31,000 c. P29,800 d. P31,800
In January, Hunter Corporation entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P300,000, was paid for as follows:
|
Down payment .......................................... |
P 30,000 |
|
Note payable in 10 equal monthly installments ......... |
240,000 |
|
1,000 shares of Hunter common stock with an agreed value of P50 per share .............................. |
50,000 |
|
Total ................................................. |
P320,000 |
Your audit disclosed that prior to the machine's use, installation costs of P8,000 were incurred. The machine has an estimated useful life of ten years and an estimated salvage value of P10,000. As auditor of the corporation, what should Hunter record as
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
