Initial Recognition Extra Corporation is installing a new plant at its production facility. It has incurred these costs: Purchase Price of Plant P 5,000,000 Initial Delivery and Handling Costs 250,000 Cost of Site Preparation 800,000 Consultants used for advice on the acquisition of the plant 1,400,000 Estimated dismantling costs be incurred after7 years 700,000 Operating losses before commercial production 400,000 Required: The total costs that can be capitalized in accordance with PAS/IAS 16 is:
Initial Recognition Extra Corporation is installing a new plant at its production facility. It has incurred these costs: Purchase Price of Plant P 5,000,000 Initial Delivery and Handling Costs 250,000 Cost of Site Preparation 800,000 Consultants used for advice on the acquisition of the plant 1,400,000 Estimated dismantling costs be incurred after7 years 700,000 Operating losses before commercial production 400,000 Required: The total costs that can be capitalized in accordance with PAS/IAS 16 is:
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Initial Recognition
Extra Corporation is installing a new plant at its production facility. It has incurred these costs:
Purchase Price of Plant
P 5,000,000
Initial Delivery and Handling Costs
250,000
Cost of Site Preparation
800,000
Consultants used for advice on the acquisition of the plant
1,400,000
Estimated dismantling costs be incurred after7 years
700,000
Operating losses before commercial production
400,000
Required:
The total costs that can be capitalized in accordance with PAS/IAS 16 is:
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