The amount to be capitalized as the cost of the machine is :-
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On August 1, 2022, Mendez Corporation purchased a new machine on a deferred payment basis. A down payment of €2,000 was made and 4 annual installments of €6,000 each are to be made beginning on September 1, 2022. The cash equivalent price of the machine was €23,000. Due to an employee strike, Mendez could not install the machine immediately, and thus incurred €300 of storage costs. Costs of installation (excluding the storage costs) amounted to €800. The amount to be capitalized as the cost of the machine is :-
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€23,000.
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€23,800
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€26,000.
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€24,100 |
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