Page 6 18 on janna company showed the following

Info icon This is a preview. Sign up to view the full content.

PAGE 6 18. On December 31, 2015, Janna Company showed the following information for amounts capitalized as machinery that it assembled for its own use: Cost of dismantling old machine 100,000 Raw materials used 1,200,000 Labor in construction 500,000 Cost of installation in factory 50,000 Materials spoiled and labor paid in trial run 50,000 Profit in construction 250,000 Purchase of machine tools 150,000 Cash proceeds from sale of old machine ( 80,000) 2,220,000 An analysis of the details in the account discloses the following: The old machine, which was removed in the installation of the new one, had been fully depreciated. A discount was received on the prompt payment of materials used in construction for P50,000 and this was reported in the purchase discount account. The factory overhead account shows a balance of P2,500,000 for the year ended December 31, 2015. This balance exceeds normal overhead on plant activities by P200,000 and is attributable machine construction. The profit was recognized on construction for the difference between total cost incurred and the price at which the machine could have been bought. What is the cost of the machinery?
Image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern