Asked by amirhossein jafarikermanshahi on May 16, 2024
Verified
How is the cost computed for individual assets purchased as a lump-sum?
Lump-sum
A single payment made at a particular time, as opposed to several smaller installment payments.
Individual Assets
Specific items of property owned by an individual or entity, including tangible and intangible assets.
- Calculate the distribution of costs for assets acquired in a bulk purchase.
Verified Answer
PG
Prakhar GuptaMay 23, 2024
Final Answer :
Plant assets should be recorded at cost when acquired.Cost includes all normal and reasonable expenditures necessary to get the asset in place and ready for its intended use.The cost of a lump-sum purchase is allocated among its individual assets based on their relative market (or estimated)values.
Learning Objectives
- Calculate the distribution of costs for assets acquired in a bulk purchase.
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