Bonus Corporation is installing a new machine at its production facility. It has incurred these costs:   Purchase price (including input tax of P300,000) P2,800,000 Initial delivery and handling costs 200,000 Costs of site preparation 600,000 Consultants used for advice on the acquisition of the machine 700,000 Installation and assembly costs 500,000 Costs of testing 100,000 Costs of training employees on how to use the machine 80,000 Estimated dismantling costs to be incurred after 7 years 300,000 Operating losses before commercial production 400,000   The cost of the machine is   A. 4,900,000 B. 5,200,000 C. 4,200,000 D. 4,980,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Bonus Corporation is installing a new machine at its production facility. It has incurred these costs:

 

Purchase price (including input tax of P300,000)

P2,800,000

Initial delivery and handling costs

200,000

Costs of site preparation

600,000

Consultants used for advice on the acquisition of the machine

700,000

Installation and assembly costs

500,000

Costs of testing

100,000

Costs of training employees on how to use the machine

80,000

Estimated dismantling costs to be incurred after 7 years

300,000

Operating losses before commercial production

400,000

 

The cost of the machine is

 

A. 4,900,000

B. 5,200,000

C. 4,200,000

D. 4,980,000

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