Jamela Company acquired a welding machine with an invoice price of P5,000,000 subject to a cash discount of 10% which was not taken. Jamela Company incurred freight and insurance during shipment of P50,000 and testing and installation cost of P150,000. Jamela Company also incurred cost of P20,000 in removing the old welding machine prior to the installation of the new one. Welding supplies were acquired at a cost of P80,000. What is the cost of the new welding machine?

Jamela Company acquired a welding machine with an invoice price of P5,000,000 subject to a cash discount of 10% which was not taken. Jamela Company incurred freight and insurance during shipment of P50,000 and testing and installation cost of P150,000. Jamela Company also incurred cost of P20,000 in removing the old welding machine prior to the installation of the new one. Welding supplies were acquired at a cost of P80,000. What is the cost of the new welding machine?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Lax Company recently acquired two items of equipment. The transactions are described as follows: * * Acquired a press at an invoice price of P3,000,000 subject to a 5% cash discount which was taken. Costs of freight and insurance during shipment were P50,000 and installation cost amounted to P200,000. Acquired a welding machine at an invoice price of P2,000,000 subject to a 10% cash discount which was not taken. Additional welding supplies were acquired at a cost of P100,000. The increase in the equipment account as a result of the above transactions should be a. 4,900,000 b. 5,000,000 c. 5,100,000 d. 5,200,000.
Pasado Company recently acquired two items of equipment.• Acquired a press at an invoice price of P3,000,000 subject to a 5% cash discount which was taken. Costs of freight and insurance during shipment were P50,000 and installation cost amounted to P200,000.• Acquired a welding machine at an invoice price of P2,000,000 subject to a 10% cash discount which was not taken. Additional welding supplies were acquired at a cost of P100,000.What is the total increase in the equipment account as a result of the transactions?
Willis Company trades in a printing press for a newer model. The cost of the old printing press was $62,000, and accumulated depreciation up to the date of the trade - in is $46,000. The company also pays $45,000 cash for the newer printing press. The fair market value of the newer printing press is $70,000. The journal entry to acquire the new printing press will required a debit to Printing Press for: A. $45,000 B. $108,000. C. $70,000. D. $62,000
GRACE Co. recently acquired two items of equipment. Acquired a press at an invoice price of P5,000,000 subject to a 5% cash discount which was taken. Costs of freight and insurance during shipment were P50,000 and installation cost amounted to P200,000. The cost of testing the equipment is P50,000 while the administration cost has amounted to P30,000. Acquired a welding machine at an invoice price of P3,000,000 subject to a 10% cash discount which was not taken. Additional welding supplies were acquired at a cost of P100,000. Required: What is the total increase in the equipment account as a result of the transactions?
Siargao Company recently acquired two items of equipment. Acquired a press at an invoice price of P3,000,000 subject to a 5% cash discount which was taken. Costs of freight and insurance during shipment v P50,000 and installation cost amounted to P200,000. were Acquired a welding machine at an invoice price of P2,000,000 subject to a 10% cash discount which was not taken. Additional welding supplies were acquired at a cost of P100,000. What is the total initial amount to be capitalized as the cost of themachineries?
In October, Dean Company exchanged an old packing machine costing P240,000 and 50% depreciated, for a dissimilar used machine and paid a cash difference of P32,000. The market value of the old packaging machine was determined to be P140,000. How much is the cost of the newly acquired machine and the amount of gain or loss, respectively, that Dean should record on this exchange?
ABC Ltd. Incurred the following costs related to the purchase of a machine: $10,500 Invoice price Insurance during transit Pouring cement slab on which the machine must be mounted Interest expense on debt used to buy the asset Shipping costs Annual service contract cost ö $14,600 $12,100 What is the amount capitalized to the balance sheet for the machine? $11,800 200 $13,600 1,000 2,500 100 300
In December 2005, SHOWEE Company exchanged an old machine, with a cost P6,000,000 and 50% depreciated, for a dissimilar used machine and paid a cash difference of P1,500,000. The fair value of the old machine was determined to be P2,000,000. SHOWEE should record the machine at 6,000,000 3,500,000 3,000,000 2,000,000
ALPHA Company purchased equipment on 1/1/N with an invoice price of $80,000. Purchase taxes $16,000. Other costs incurred were freight costs, $1,100; installation wiring and foundation, $2,200; material and labor costs in testing equipment, $700; fire insurance policy for the factory is, $1,400. The equipment is estimated to have a $5,000 salvage value at the end of its 5-year useful service life. Required: (b) If the double-declining-balance method of depreciation was used for the machine, prepare the depreciation schedule for the full period. Answer: Depreciation schedule: Year Beginning book value Declining balance rate Annual depreciation expenses Accumulated depreciation Book value 2017 2018 2019 2020 2021
ALPHA Company purchased equipment on 1/1/N with an invoice price of $80,000. Purchase taxes $16,000. Other costs incurred were freight costs, $1,100; installation wiring and foundation, $2,200; material and labor costs in testing equipment, $700; fire insurance policy for the factory is, $1,400. The equipment is estimated to have a $5,000 salvage value at the end of its 5-year useful service life. Required: (a)Compute the acquisition cost of the equipment. (b)If the double-declining-balance method of depreciation was used for the machine, prepare the depreciation schedule for the full period. (c) Based on which criteria companies choose the depreciation methods for their depreciable assets?
Joy Corporation decided to dispose of an item of plant that is carried in its records at a cost of P450,000, with accumulated depreciation of P80,000. Depreciation on the plant since it was originally acquired has been charged at P5,000 per month. The plant will continue to be operated until it is sold, at which time the operations of the plant will be outsourced. The company undertook all the necessary actions to be able to classify the asset as held for sale. It is estimated that it could sell the plant for its fair value, P350,000, incurring P10,000 selling costs in the process. The plant has been depreciated at an amount of P5,000 per month. On December 31, 2016, the plant had not been sold but, due to a shortage of this type of plant, there had been an increase in the fair value to P360,000 while expected costs to sell remain at P10,000.If Joy Corporation sold the plant on March 1, 2017 for a net proceeds of P351,000, what amount should be included as gain on disposal in the…
Phoenix Co. acquired a large piece of specialized machinery used in its manufacturing process. The following costs were incurred in connection with the aquisition: Finder's fee $2,000 List price $230,000 Transportation fee $4,000 Speeding ticket during transportation $65 Installation fee $2,500 Cost to repair a door damaged during installation $1,200 Required: Which of the costs incurred by Phoenix Co. should be capitalized to the machinery account?