The directors of Sydenham Ltd have recently purchased a new item of manufacturing equipment. The invoiced...
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The directors of Sydenham Ltd have recently purchased a new item of manufacturing equipment. The invoiced price of the equipment was P37,000, delivery costs were P1,600, and installation and testing costs were P4,500. As part of the process of testing the equipment, the company produced some samples, which were slightly imperfect and were sold for P1,800. After the equipment had been successfully installed and tested the company incurred costs of P3,000 intraining staff to use it. Prepare brief notes for the directors of Sydenham Ltd to cover the following: (a) When should items of property, plant and equipment be recognised as assets? (4) Which costs should be included on initial recognition of property, plant and equipment? (4) (b) (c) Calculate the amount that should be recognised in property, plant and equipment as the cost of the new item of manufacturing equipment. (5) The directors of Sydenham Ltd have recently purchased a new item of manufacturing equipment. The invoiced price of the equipment was P37,000, delivery costs were P1,600, and installation and testing costs were P4,500. As part of the process of testing the equipment, the company produced some samples, which were slightly imperfect and were sold for P1,800. After the equipment had been successfully installed and tested the company incurred costs of P3,000 intraining staff to use it. Prepare brief notes for the directors of Sydenham Ltd to cover the following: (a) When should items of property, plant and equipment be recognised as assets? (4) Which costs should be included on initial recognition of property, plant and equipment? (4) (b) (c) Calculate the amount that should be recognised in property, plant and equipment as the cost of the new item of manufacturing equipment. (5)
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a Items of property plant and equipment should be recognized as assets when certain criteria are met ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Posted Date:
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