Books - Non-fiction

QUIZ AP

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QUIZ AP
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  Problem 1 TULFO COMPANY incurred the following expenditures in 2018: Purchase of Land P 7,892,000 Land Survey 104,000 Fees for search of title for land 12,000 Building permit fee 70,000 Temporary quarters for construction crews 215,000 Cost to demolish old building 940,000 Excavation of basement 200,000 Special assessment for street project 40,000 Dividends 100,000 Damages awarded for injuries sustained in construction (no insurance carried) 168,000 Cost of Construction 58,000,000 Cost of paving parking lot adjoining building 800,000 Cost of shrubs, trees, and other landscaping 660,000  A portion of the building site had been temporarily used by TULFO to operate a car park while the building was being constructed. A total of P325,000 was earned by TULFO from this incidental activity. 1. What is the cost of the land? 2. What is the cot of the land improvements? 3. What is the cost of the building? Problem 2 The following data pertain to UKELELE CORPORATION’s property, plant and equipment for 2018.  Audited balances at December 31, 2017 Debit Credit Land 7,500,000 Buildings 30,000,000  Accum. Depreciation  –  Buildings 6,775,500 Machinery and Equipment 22,500,000  Accum. Depreciation  –  Machinery and Equipment 6,250,000 Delivery Equipment 5,750,000  Accum. Depreciation  –  Delivery Equipment 4,230,000 Depreciation data: Depreciation Method Useful Life Buildings 150% declining balance 25 years Machinery and equipment Straight-line 10 years Delivery Equipment Sum of years digits 4 years Leasehold Improvements Straight-line Transactions during 2018 and other information are as follows: a. on January 2, 2018, UKELELE purchased a new truck for P1,000,000 cash and trade-in of a 2-year-old truck with a cost of P900,000 and a book value of P270,000. The new truck has a cash price of P1,200,000; the market value of the trade-in is not known. b. On April 1, 2018, a machine purchased for P575,000 on April 1, 2013 was stolen. UKELELE recovered P387,500 from its insurance company. c. On May 1, 2018, costs of P8,400,000 were incurred to improve leased office premises. The leasehold improvements have a useful life of 8 years. The related lease terminates on December 31, 2024. d. On July 1, 2018, machinery and equipment were purchased at a total invoice cost of P7,000,000; additional costs of P125,000 for freight and P625,000 for installation were incurred. e. UKELELE determined that the delivery equipment comprising the P5,750,000 balance at January 1, 2018 would have been depreciated at a total amount of P900,000 for the year ended December 31, 2018.  The salvage values of the depreciable assets are immaterial. The policy of UKELELE Corporation is to compute depreciation to the nearest month. 4. Depreciation expense for 2018 on Buildings 5. Depreciation expense for 2018 on Machinery and Equipment 6. Depreciation expense for 2018 on Delivery Equipment 7. Depreciation expense for 2018 on Leasehold Improvements 8. Accumulated Depreciation  –  Buildings on December 31, 2018 9. Accumulated Depreciation  –  Machinery and Equipment on December 31, 2018 10. Accumulated Depreciation  –  Delivery Equipment on December 31, 2018 11. The amount to be presented as Property, Plant and Equipment on UKELELE’s  statement of financial position on December 31, 2018 is Problem 3
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