On August 1, 2014, Bright Company purchased a new machine on a deferred payment basis. A down payment of P100,000 was made and 4 monthly installments of P250,000 each are to be made beginning on August 1, 2014. The terms of the agreement is not considered normal. The cash equivalent price of the machine was P950,000. Bright incurred and paid installation costs amounting to P30,000. How much should be capitalized as cost of the machine.
On August 1, 2014, Bright Company purchased a new machine on a deferred payment basis. A down payment of P100,000 was made and 4 monthly installments of P250,000 each are to be made beginning on August 1, 2014. The terms of the agreement is not considered normal. The cash equivalent price of the machine was P950,000. Bright incurred and paid installation costs amounting to P30,000. How much should be capitalized as cost of the machine.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![On August 1, 2014, Bright Company purchased a new machine on a deferred payment basis. A down payment of
P100,000 was made and 4 monthly installments of P250,000 each are to be made beginning on August 1, 2014. The
terms of the agreement is not considered normal. The cash equivalent price of the machine was P950,000. Bright
incurred and paid installation costs amounting to P30,000. How much should be capitalized as cost of the machine.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd164bc73-40e7-4d32-8616-26e06d24a69e%2F9a906cff-bf38-459a-83aa-78310838679a%2Fg3k91_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On August 1, 2014, Bright Company purchased a new machine on a deferred payment basis. A down payment of
P100,000 was made and 4 monthly installments of P250,000 each are to be made beginning on August 1, 2014. The
terms of the agreement is not considered normal. The cash equivalent price of the machine was P950,000. Bright
incurred and paid installation costs amounting to P30,000. How much should be capitalized as cost of the machine.
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