Determine the total capitalisable costs of the machine

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Reference no: EM131340962

At the beginning of 2002, Gadue Computer purchased a machine, used in the production of computers, for EUR 359,000. In addition to the price of the machine, Gadue paid insurance during shipment of EUR 2,500; transportation costs of EUR 3,500; installation costs of EUR 10,000; and training costs of EUR 7,000. Also repair costs incurred before the end of 2002 were EUR 2,000.

The machine was expected to last five years and has a residual value of EUR 25,000. Gadue uses straight-line depreciation on all machines of this type.

At the beginning of year 2005 the machine was sold for EUR 175,000.
(a) Determine the total capitalisable costs of the machine.

(b) Show the impact of the acquisition of this machine on the accounting equation.

(d) Determine the gain (loss) on disposal of this machine.

(e) Use the accounting equation to analyse the disposal of the machine.

Reference no: EM131340962

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