New machinery, which replaced a number of employees,was installed and put in operation in the last month of thefiscal year. The employees had been dismissed afterpayment of an extra month’s wages, and this amount wasadded to the cost of the machinery. Discuss the propriety ofthe charge. If it was improper, describe the propertreatment.
New machinery, which replaced a number of employees,was installed and put in operation in the last month of thefiscal year. The employees had been dismissed afterpayment of an extra month’s wages, and this amount wasadded to the cost of the machinery. Discuss the propriety ofthe charge. If it was improper, describe the propertreatment.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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New machinery, which replaced a number of employees,
was installed and put in operation in the last month of the
fiscal year. The employees had been dismissed after
payment of an extra month’s wages, and this amount was
added to the cost of the machinery. Discuss the propriety of
the charge. If it was improper, describe the proper
treatment.
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