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    NFCPAR-Auditing Problems: Description Machinery Others Notes

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    Sano Manjiro
    This document provides a summary of costs associated with the purchase and installation of new machinery. It lists purchase price, installation costs, and other costs that are considered part of the initial cost of the machinery according to accounting standards. Costs not considered part of the initial cost include repair costs, loss on a retired machine, and training costs for personnel, as they are not described in the accounting standards as components of property, plant and equipment cost. The total reported cost of the machinery is 1,476,000 and the total of other costs not considered part of the machinery cost is 48,000.

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    NFCPAR-Auditing Problems: Description Machinery Others Notes

    Uploaded by

    Sano Manjiro
    67 views1 page
    This document provides a summary of costs associated with the purchase and installation of new machinery. It lists purchase price, installation costs, and other costs that are considered part of the initial cost of the machinery according to accounting standards. Costs not considered part of the initial cost include repair costs, loss on a retired machine, and training costs for personnel, as they are not described in the accounting standards as components of property, plant and equipment cost. The total reported cost of the machinery is 1,476,000 and the total of other costs not considered part of the machinery cost is 48,000.

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    This document provides a summary of costs associated with the purchase and installation of new machinery. It lists purchase price, installation costs, and other costs that are considered part of the initial cost of the machinery according to accounting standards. Costs not considered part of the initial cost include repair costs, loss on a retired machine, and training costs for personnel, as they are not described in the accounting standards as components of property, plant and equipment cost. The total reported cost of the machinery is 1,476,000 and the total of other costs not considered part of the machinery cost is 48,000.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    67 views1 page

    NFCPAR-Auditing Problems: Description Machinery Others Notes

    Uploaded by

    Sano Manjiro
    This document provides a summary of costs associated with the purchase and installation of new machinery. It lists purchase price, installation costs, and other costs that are considered part of the initial cost of the machinery according to accounting standards. Costs not considered part of the initial cost include repair costs, loss on a retired machine, and training costs for personnel, as they are not described in the accounting standards as components of property, plant and equipment cost. The total reported cost of the machinery is 1,476,000 and the total of other costs not considered part of the machinery cost is 48,000.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 1

    NFCPAR- Auditing Problems

    Solution Guide Property, Plant, and Equipment

    DESCRIPTION MACHINERY OTHERS NOTES


    Purchase price including VAT 1,400,000 (1)
    Cost of water device to keep machine cool 8,000 (2)
    Cost of safety rail and platform surrounding machine 12,000 (2)
    Installation cost, including site preparation and assembling 20,000 (2)
    Fees paid to consultants for advice on acquisition of the (2)
    13,000
    machinery
    Dismantling cost of the machine 10,000 (3)
    Repair cost of the machine damaged while in the process 5,000 (4)
    of installation
    Loss on premature retirement-old machine 18,000 (4)
    Other non-refundable Sales tax 13,000 (1)
    Cost of training for personnel who will use the machine 25,000 (4)
    TOTAL 1,476,000 48,000

    NOTES

    1. PAS 16, paragraph 16-a: The cost of an item of PPE includes its purchase price, including
    import duties and non-refundable purchase taxes, after deducting trade discounts and rebates.
    Since VAT is a refundable purchase tax, it is not included to the cost of the machinery.
    2. PAS 16, paragraph 16-b: The cost of an item of PPE includes any cost directly attributable
    to bringing the asset to the location and condition necessary for it to be capable of operating in
    the manner intended by management.
    3. PAS 16, paragraph 16-c: The cost of an item of PPE includes the initial estimate of the cost
    of dismantling and removing the item and restoring the site on which it is located.
    4. These items are not described by PAS 16, paragraph 16 “components of the cost of an item
    of PPE”. Therefore, these items are not included to the cost of the machinery.

    Page 3 of 45

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