Cactus Ltd acquires some printing machinery. The amount paid to the manufacturer is $85000, plus an additional
Question:
Cactus Ltd acquires some printing machinery. The amount paid to the manufacturer is $85000, plus an additional $2000 for delivery. Once the machinery is delivered, it needs some modifications before it can be used. The modifications amount to $7000. An additional amount of $2000 is paid for installation.
REQUIRED
a. For accounting purposes, what is the ‘cost’ of the machinery?
b. Could other costs be included in the measurement of the cost of acquiring the printing machinery if its construction and installation took a substantial period of time?
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a Because of the difference between carrying amount and fair value there is a difference between the ...View the full answer
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