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New machinery was installed to replace a number of employees

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New machinery was installed to replace a number of employees, who were paid an extra month's wages and dismissed. This amount was added to the cost of the machinery. Discuss the propriety of the charge. If it was improper, describe the proper treatment.

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New machinery was installed to replace a number of employees, who were paid an extra month's wages and dismissed. This amount was added to the cost of the machinery. Discuss the propriety of the charge. If it was improper, describe the proper treatment.

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The amount paid to replaced employees should not have been added to the cost of the machine. By the company adding it to the cost of the machinery, they have violated GAAP.

Proper treatment of the cost of the new ...

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