Write CAPITALIZED if the subsequent cost incurred SHALL FORM PART of the carrying amount of the PPE or EXPENSED OUTRIGHT if the subsequent cost incurred SHALL NOT FORM PART of the carrying amount of the PPE. Acquired safety equipment to be attached for one of the production equipment for P 150,000 as required by new law.Acquired five new machineries for new P 800,000 each.Rearranged the production PPEs in Factory A for P 500,000 to make it more presentable before the management team visits the factory.Rearranged the production PPEs in Factory B for P 400,000 to accommodate a newly purchased equipment that will make the production process faster and more efficient.Repaired one of the machineries for P 350,000 as part of factory’s annual examination.Repaired another machinery for P 275,000 to prolong its remaining useful life from five years to seven years.Replaced a significant part of a production equipment for P 900,000. The equipment has an original cost of P 4,000,000 and accumulated depreciation as of date P 1,000,000. The part replaced represented 20% of the carrying amount and it was sold for a very nominal amount.Replaced building roof for P 300,000 as part of maintenanceSet up a new production unit in the same vicinity as the existing unit to increase the production capacity by 300 MTFilling paint chips with touch up paints and body filler of delivery vehicle for P 25,000

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Answered: Acquired safety equipment to be…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 19E

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Write CAPITALIZED if the subsequent cost incurred SHALL FORM PART of the carrying amount of the PPE or EXPENSED OUTRIGHT if the subsequent cost incurred SHALL NOT FORM PART of the carrying amount of the PPE.

Acquired safety equipment to be attached for one of the production equipment for P 150,000 as required by new law.
Acquired five new machineries for new P 800,000 each.
Rearranged the production PPEs in Factory A for P 500,000 to make it more presentable before the management team visits the factory.
Rearranged the production PPEs in Factory B for P 400,000 to accommodate a newly purchased equipment that will make the production process faster and more efficient.
Repaired one of the machineries for P 350,000 as part of factory’s annual examination.
Repaired another machinery for P 275,000 to prolong its remaining useful life from five years to seven years.
Replaced a significant part of a production equipment for P 900,000. The equipment has an original cost of P 4,000,000 and accumulated depreciation as of date P 1,000,000. The part replaced represented 20% of the carrying amount and it was sold for a very nominal amount.
Replaced building roof for P 300,000 as part of maintenance
Set up a new production unit in the same vicinity as the existing unit to increase the production capacity by 300 MT
Filling paint chips with touch up paints and body filler of delivery vehicle for P 25,000

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