ACC 107 - First Periodical Examination

Frequently missed questions

 
Question
Correct responses
1. When a company purchases land with a building on it and immediately tears down
the building so that the land can be used for the construction of a plant, the costs
incurred to tear down the building should be
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2. Lakepoint Company recently accepted a donation of land with a fair value of

₱200,000 from an unrelated party. The entry that Lakepoint should use to record this
land is:
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10. How much is the gain (loss) from the sale?

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12. Which of the following statements regarding depreciation is true?

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13. Which of the following statements is incorrect concerning the depreciation

methods?
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16. A machine with a 5-year estimated useful life and an estimated residual value
was acquired at the beginning of the current year. At the end of the fourth year,
accumulated depreciation using the sum of years' digits method would be
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22. Ignoble Company reported the following property, plant and equipment at year-
end: Acquired the land and building of another entity, 8,400,000; Repairs made to
building prior to occupancy, 200,000; Special tax assessment, 30,000; Remodeling of
office space in building including new partitions and walls, 400,000; Total Costs,
9,030,000. The assets acquired had the following fair value: Land, 3,000,000;
Building, 4,000,000. In exchange for the land and building acquired, the entity
issued 40,000 shares with P100 par value and P210 market value. What is the cost of
the land?
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22. Ignoble Company reported the following property, plant and equipment at year-
end: Acquired the land and building of another entity, 8,400,000; Repairs made to
building prior to occupancy, 200,000; Special tax assessment, 30,000; Remodeling of
office space in building including new partitions and walls, 400,000; Total Costs,
9,030,000. The assets acquired had the following fair value: Land, 3,000,000;
Building, 4,000,000. In exchange for the land and building acquired, the entity
issued 40,000 shares with P100 par value and P210 market value. What is the cost of
the building?
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23. What amount should be capitalized as cost of land?

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24. What amount should be capitalized as cost of building?

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26. On June 30, 2014, a fire in Pine Company's plant caused a total loss to a
production machine. The machine was depreciated at P200,000 annually and had a
carrying amount of P1,600,000 on January 1,2014. On the date of the fire, the fair
value of the machine was P2,200,000, and the entity received insurance proceeds of
P2,000,000 in October 2014. What amount should be recognized as gain on disposition?
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28. Seaside Company applied revaluation accounting to plant asset with carrying
amount of P4,000,000 on January 1, 2014, useful life of 4 years, and no residual
value. Depreciation is calculated on the straight line basis. On December 31, 2014,
independent appraisers determined that the asset has a fair value of P3,750,000.
What is included in the journal entry to record depreciation for 2014?
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38. If an expense has been incurred but not yet recorded, the adjusting entry would
involve
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