On August 1, 2020, KJ Corporation purchased a new machine on a deferred payment basis....
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On August 1, 2020, KJ Corporation purchased a new machine on a deferred payment basis. A down-payment of P200,000 was made and a 4 annual installments of P600,000 each are to be made beginning on September 1, 2020. Terms of the contract is not normal in the industry where the same type of assets are being traded. Due to an employee strike, Sunny could not install the machine immediately, thus, incurred P3,000 of storage costs. Cost of installation(excluding the storage costs) amounted to P20,000. The cash price of the machine was P2,300,000.How much should be capitalized as cost of the machine?
P2,300,000
P2,323,000
P2,320,000
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