What amount should be capitalized as the cost of the new equipment?The Whale Corporation acquired some new equipment. The following data have been madeavailable to you:List price of the equipmentFreight paid on the new equipmentCash discount available but not takenCost of removing the old equipmentInstallation costs of the new equipmentP140,0004,5002,0001,7004,300Testing costs before the equipment was put to regular operations(including P1,200 in wages of the regular operator)Loss on premature retirement of the old equipmentEstimated cost of manufacturing similar equipment in the company'sown plant, including overheadOa. P288,650O b. P150,650O c. P149,750O d. P147,750O Other:2,9501,200138,000

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What amount should be capitalized as the cost of the new equipment?

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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Question

What amount should be capitalized as the cost of the new equipment?
The Whale Corporation acquired some new equipment. The following data have been made
available to you:
List price of the equipment
Freight paid on the new equipment
Cash discount available but not taken
Cost of removing the old equipment
Installation costs of the new equipment
P140,000
4,500
2,000
1,700
4,300
Testing costs before the equipment was put to regular operations
(including P1,200 in wages of the regular operator)
Loss on premature retirement of the old equipment
Estimated cost of manufacturing similar equipment in the company's
own plant, including overhead
Oa. P288,650
O b. P150,650
O c. P149,750
O d. P147,750
O Other:
2,950
1,200
138,000

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