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Mohan purchased a machinery amounting $1,100,000 on 1st April, 2000. On 31st March, 2006. The similar machinery could be purchased for $2,800,000 but the realizable value of the machinery (purchased on 1.4.2000) was estimated at $1,500,000. The present discounted value of the future net cash inflows that the machinery was expectd to generate in the normal course of business, was calculated as $1,250,000. 36. the current cost of the machinery is:?
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Mohan purchased a machinery amounting $1,100,000 on 1st April, 2000. O...
Current Cost of Machinery
To calculate the current cost of the machinery, we need to consider the following:
1. Historical Cost: The machinery was purchased for $1,100,000 on 1st April, 2000.
2. Replacement Cost: The similar machinery could be purchased for $2,800,000 on 31st March, 2006.
3. Realizable Value: The realizable value of the machinery (purchased on 1.4.2000) was estimated at $1,500,000.
4. Present Value of Future Cash Flows: The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business was calculated as $1,250,000.
Calculation of Current Cost:
Based on the above information, the current cost of the machinery can be calculated as follows:
1. Historical Cost: $1,100,000
2. Replacement Cost: $2,800,000
3. Realizable Value: $1,500,000
4. Present Value of Future Cash Flows: $1,250,000
Using the above information, we can calculate the current cost of the machinery as follows:
Current Cost = Historical Cost - (Realizable Value - Present Value of Future Cash Flows)
Current Cost = $1,100,000 - ($1,500,000 - $1,250,000)
Current Cost = $850,000
Therefore, the current cost of the machinery is $850,000.
Explanation:
The current cost of the machinery is calculated by subtracting the reduction in the value of the machinery from its historical cost. The reduction in value is calculated by subtracting the realizable value of the machinery from the present value of its future cash flows. This method is used to determine the current cost of an asset when the value of the asset has changed over time.
To calculate the current cost of the machinery, we need to consider the following:
1. Historical Cost: The machinery was purchased for $1,100,000 on 1st April, 2000.
2. Replacement Cost: The similar machinery could be purchased for $2,800,000 on 31st March, 2006.
3. Realizable Value: The realizable value of the machinery (purchased on 1.4.2000) was estimated at $1,500,000.
4. Present Value of Future Cash Flows: The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business was calculated as $1,250,000.
Calculation of Current Cost:
Based on the above information, the current cost of the machinery can be calculated as follows:
1. Historical Cost: $1,100,000
2. Replacement Cost: $2,800,000
3. Realizable Value: $1,500,000
4. Present Value of Future Cash Flows: $1,250,000
Using the above information, we can calculate the current cost of the machinery as follows:
Current Cost = Historical Cost - (Realizable Value - Present Value of Future Cash Flows)
Current Cost = $1,100,000 - ($1,500,000 - $1,250,000)
Current Cost = $850,000
Therefore, the current cost of the machinery is $850,000.
Explanation:
The current cost of the machinery is calculated by subtracting the reduction in the value of the machinery from its historical cost. The reduction in value is calculated by subtracting the realizable value of the machinery from the present value of its future cash flows. This method is used to determine the current cost of an asset when the value of the asset has changed over time.
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Mohan purchased a machinery amounting $1,100,000 on 1st April, 2000. On 31st March, 2006. The similar machinery could be purchased for $2,800,000 but the realizable value of the machinery (purchased on 1.4.2000) was estimated at $1,500,000. The present discounted value of the future net cash inflows that the machinery was expectd to generate in the normal course of business, was calculated as $1,250,000. 36. the current cost of the machinery is:?
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Mohan purchased a machinery amounting $1,100,000 on 1st April, 2000. On 31st March, 2006. The similar machinery could be purchased for $2,800,000 but the realizable value of the machinery (purchased on 1.4.2000) was estimated at $1,500,000. The present discounted value of the future net cash inflows that the machinery was expectd to generate in the normal course of business, was calculated as $1,250,000. 36. the current cost of the machinery is:? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Mohan purchased a machinery amounting $1,100,000 on 1st April, 2000. On 31st March, 2006. The similar machinery could be purchased for $2,800,000 but the realizable value of the machinery (purchased on 1.4.2000) was estimated at $1,500,000. The present discounted value of the future net cash inflows that the machinery was expectd to generate in the normal course of business, was calculated as $1,250,000. 36. the current cost of the machinery is:? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mohan purchased a machinery amounting $1,100,000 on 1st April, 2000. On 31st March, 2006. The similar machinery could be purchased for $2,800,000 but the realizable value of the machinery (purchased on 1.4.2000) was estimated at $1,500,000. The present discounted value of the future net cash inflows that the machinery was expectd to generate in the normal course of business, was calculated as $1,250,000. 36. the current cost of the machinery is:?.
Mohan purchased a machinery amounting $1,100,000 on 1st April, 2000. On 31st March, 2006. The similar machinery could be purchased for $2,800,000 but the realizable value of the machinery (purchased on 1.4.2000) was estimated at $1,500,000. The present discounted value of the future net cash inflows that the machinery was expectd to generate in the normal course of business, was calculated as $1,250,000. 36. the current cost of the machinery is:? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Mohan purchased a machinery amounting $1,100,000 on 1st April, 2000. On 31st March, 2006. The similar machinery could be purchased for $2,800,000 but the realizable value of the machinery (purchased on 1.4.2000) was estimated at $1,500,000. The present discounted value of the future net cash inflows that the machinery was expectd to generate in the normal course of business, was calculated as $1,250,000. 36. the current cost of the machinery is:? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mohan purchased a machinery amounting $1,100,000 on 1st April, 2000. On 31st March, 2006. The similar machinery could be purchased for $2,800,000 but the realizable value of the machinery (purchased on 1.4.2000) was estimated at $1,500,000. The present discounted value of the future net cash inflows that the machinery was expectd to generate in the normal course of business, was calculated as $1,250,000. 36. the current cost of the machinery is:?.
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