In January, Prahbu purchased for $84,000 a new machine for use in an existing production...
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Accounting
In January, Prahbu purchased for $ a new machine for use in an existing production line of his manufacturing business. Assume that the machine is a unit of property and is not a material or supply. Prahbu pays $ to install the machine, and after the machine is installed, he pays $ to perform a critical test on the machine to ensure that it will operate in accordance with quality standards. On November the critical test is complete, and Prahbu places the machine in service on the production line. On December Prahbu pays another $ to perform periodic quality control testing after the machine is placed in service.
How much will Prahbu be required to capitalize as the cost of the machine?
Cost basis
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