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On September 7, 2020, Paseo Company incurred the following costs for one of its printing presses: Purchase of stapling attachment: P900,000 Installation of attachment: P200,000 Replacement parts for renovation of press: P600,000 Labor and overhead in connection with renovation of press: P280,000. Neither the attachment nor the renovation increased the estimated useful life of the press. However, the renovation resulted in significantly increased productivity. What amount of the costs should be capitalized? *   P1,980,000 P1,100,000 P900,000 P880,000

On September 7, 2020, Paseo Company incurred the following costs for one of its printing presses: Purchase of stapling attachment: P900,000 Installation of attachment: P200,000 Replacement parts for renovation of press: P600,000 Labor and overhead in connection with renovation of press: P280,000. Neither the attachment nor the renovation increased the estimated useful life of the press. However, the renovation resulted in significantly increased productivity. What amount of the costs should be capitalized? *   P1,980,000 P1,100,000 P900,000 P880,000

FINANCIAL ACCOUNTING
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 September 7, 2020, Paseo Company incurred the following costs for one of its printing presses: Purchase of stapling attachment: P900,000 Installation of attachment: P200,000 Replacement parts for renovation of press: P600,000 Labor and overhead in connection with renovation of press: P280,000. Neither the attachment nor the renovation increased the estimated useful life of the press. However, the renovation resulted in significantly increased productivity. What amount of the costs should be capitalized? *

 

P1,980,000

P1,100,000

P900,000

P880,000

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