PROBLEM 3: EXERCISES 1. Ludwig Co. acquired a piece of factory equipment overseas on cash basis for P100,000. Additional costs incurred include the following: broker's commission, P5,000; import duties, P25,000; non-refundable purchase taxes, P10,000; freight cost of transferring the equipment to Ludwig Co.'s premises, P1,000; costs of assembling and installing the equipment, P2,000; costs of testing the equipment, P1,500; administrative and other general overhead costs, P4,200; and advertisement and promotion costs of the new product to be produced by the equipment, P3,800. The samples generated from testing the equipment were sold for P500. The cost of the samples is P700. Requirements: a. Compute for the initial cost of the equipment. b. Provide the journal entries