amela Company acquired a welding machine on account 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. Welding supplies were acquired at a cost of P80,000. The residual value is 10% of its total cost while its estimated useful life is 5 years. What is the cost of the new welding machine? How much is the depreciable amount of the new welding machine? How much is the annual depreciation using the straight line method?
amela Company acquired a welding machine on account 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. Welding supplies were acquired at a cost of P80,000. The residual value is 10% of its total cost while its estimated useful life is 5 years. What is the cost of the new welding machine? How much is the depreciable amount of the new welding machine? How much is the annual depreciation using the straight line method?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Jamela Company acquired a welding machine on account 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. Welding supplies were acquired at a cost of P80,000.
The residual value is 10% of its total cost while its estimated useful life is 5 years.
- What is the cost of the new welding machine?
- How much is the
depreciable amount of the new welding machine? - How much is the annual depreciation using the
straight line method ?
Please include an explanation. Thank you!
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