On 1/1 2019, the Al-Qadhafi Industrial Company purchased an automated packaging line at a price of $60,000, and the company paid in cash the fees for transporting a packaging line $55,000, the work costs of a special base for the line $135,000, and the costs of conducting start-up experiments at $150,000. The company estimated the shelf life of the packaging line 6 years, the scrap value $400,000 and it is depreciated according to the straight line. On December 31, 2019, it was found that the fair market value of the packaging line, minus its selling costs, equals $11,750,000, and its remaining life is 4 years, not 5 years. Required 1- Acknowledgment of the operations related to the packaging line in the books of the Food Industries Company: • Costs incurred to get the packaging line ready for use
On 1/1 2019, the Al-Qadhafi Industrial Company purchased an automated packaging line at a price of $60,000, and the company paid in cash the fees for transporting a packaging line $55,000, the work costs of a special base for the line $135,000, and the costs of conducting start-up experiments at $150,000. The company estimated the shelf life of the packaging line 6 years, the scrap value $400,000 and it is
Required 1- Acknowledgment of the operations related to the packaging line in the books of the Food Industries Company:
• Costs incurred to get the packaging line ready for use
• Inventory adjustments at the end of 2019
• Impairment in the value of the packaging line at the end of 2019
• Inventory adjustments at the end of 2020
• 2- Preparing the partial financial position statement for the year 2019.
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