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Extra Corporation is installing a new plant at its production facility. It has incurred these costs:
Purchase price of plant: Php. 2,500,000
Initial delivery and handling costs: 200,000
Cost of site preparation: 600,000
Consultants used for advice on the acquisition of the plant: 700,000
Estimated dismantling costs to be incurred after 7 years: 300,000
Operating losses before commercial production: 400,000
problem 1: The total costs that can be capitalized in accordance with PAS 16 is:
A. Php. 4,300,000
B. Php. 3,600,000
C. Php. 4,500,000
D. Php. 4,900,000
Financial Statement Analysis and Preparation
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