Professional Documents
Culture Documents
Ppe Finacc 1
Ppe Finacc 1
E.
The right to extract mineral resources from a land in Mindanao was purchased
for 330,000. Research and development costs incurred were 120,000 and 60,000
respectively. Estimated tons to be extracted were 5,000 tons. During the current
year 900 tons were extracted.
5. How much is the depletion for the year?
support the construction, the company applied for a loan worth 6,000,000 with
interest rate of 10.5%.
The company incurred the following costs during the following months:
Date
Costs
January 1
400,000
March 31
1,000,000
June 30
1,200,000
September
1,000,000
30
December
400,000
31
6. How much interest should the entity capitalize?
Costs
Additional information
1 January
land
200,000,000
14 January
20,000,000
Non-refundable transfer taxes (not
included in the CU200,000,000 purchase price)
14 January
acquisition
1,000,000
19 January
10,000
Reimbursing the previous owner for
prepaying the non-refundable local government property
taxes for the six-month period ending 30 June 2013
30 June
20,000
Non-refundable annual local government
property taxes for the year ending 30 June 20X2
Throughout 2013
120,000
Day-to-day repairs and maintenance,
including the osts of the administration and maintenance
staff. These costs are attributable equally to each of the 10
units.
The entity will consume the buildings future economic benefits evenly over
50 years from the date of acquisition
Fair value less costs to sell of the land and building: P250,000,000.
7. Depreciation for the year
8. Cost of Land and Buildings
3,200,000
200,000
110,000
40,000
8,500,000
140,000
190,000
100,000
30,000
290,000
50,000
300,000
I.
J.
During the current year, Weasley Company traded in an old machine for a newer
model.
Data relative to the old machine and new machines on the date of exchange are as
follows:
OLD MACHINE
Original cost
Accumulated Depreciation
Average published retail value
800,000
600,000
170,000
NEW MACHINE
List price
Cash price without trade in
Cash paid with trade in
1,000,000
900,000
780,000
11.
What is the cost of the new machine to be recorded in
the books of Weasley Company?
SUGGESTED ANSWERS
1. 10,000,000
2. 4,000,000
3. 720,000
4. 2,000
5. 91,800
6. 210,000
7. 3,136,000
8. 221,000,000
9. 3,550,000
10.
730,000
11.900,000