On January 2, 2004, Pine Corp. replaced its boiler with a more efficient one. The followinginformation was available on that date:Purchase price of new boiler Carrying amount of old boiler₱120,0005,000Fair value of old boiler3,000Installation cost of new boiler10,000The old boiler was sold for ₱3,000. What amount should Pine capitalize as the cost of the new boiler?a. ₱130,000. c. ₱125,000.b. ₱122,000. d. ₱120,000.

The cost would be calculated by adding the purchase price and the installation cost.

Answered: On January 2, 2004, Pine Corp. replaced…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 2, 2004, Pine Corp. replaced its boiler with a more efficient one. The following
information was available on that date:

Purchase price of new boiler Carrying amount of old boiler	₱120,000 5,000
Fair value of old boiler	3,000
Installation cost of new boiler	10,000

The old boiler was sold for ₱3,000. What amount should Pine capitalize as the cost of the new boiler?
a. ₱130,000. c. ₱125,000.
b. ₱122,000. d. ₱120,000.

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