ABC acquired for a lumpsum price of P6,000,000 a piece of land and the building on it. The land and building have fair values of P4,2000,000 and P2,800,000 respectively. The building is still usable but the entity plans to demolish it and construct a new building. Later, total demolition cost incurred was P400,000 but scraps were gathered and sold for P50,000. The new building had a total construction cost of P7,000,000, useful life of 25 years, and a salvage value of P500,000. a. How much is the loss on the retirement of the old building? b. What would be the capitalized cost of the new building?

ABC acquired for a lumpsum price of P6,000,000 a piece of land and the building on it. The land and building have fair values of P4,2000,000 and P2,800,000 respectively. The building is still usable but the entity plans to demolish it and construct a new building. Later, total demolition cost incurred was P400,000 but scraps were gathered and sold for P50,000. The new building had a total construction cost of P7,000,000, useful life of 25 years, and a salvage value of P500,000. a. How much is the loss on the retirement of the old building? b. What would be the capitalized cost of the new building?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 3RE: Utica Corporation paid 360,000 to purchase land and a building. An appraisal showed that the land is...

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Johnson acquired for a lumpsum price of P6,000,000 a piece of land andthe building on it. The land and building have fair values ofP4,2000,000 and P2,800,000 respectively. The building is still usablebut the entity plans to demolish it and construct a new building.Later, total demolition cost incurred was P400,000 but scraps weregathered and sold for P50,000. The new building had a totalconstruction cost of P7,000,000, useful life of 25 years, and asalvage value of P500,000. Question 1. Assuming that a new wing was constructed 5 years later fora total cost of P1,000,000 and it is expected to have a usefullife of 15 years, how much would the depreciation expenseper year be from the expanded building? (Good Accounting Form)
XYZ acquired for a lumpsum price of P6,000,000 a piece of land andthe building on it. The land and building have fair values ofP4,2000,000 and P2,800,000 respectively. The building is still usablebut the entity plans to demolish it and construct a new building.Later, total demolition cost incurred was P400,000 but scraps weregathered and sold for P50,000. The new building had a totalconstruction cost of P7,000,000, useful life of 25 years, and asalvage value of P500,000. A. What would be the depreciation expense per year for thenew building?B. Assuming that a new wing was constructed 5 years later fora total cost of P1,000,000 and it is expected to have a usefullife of 15 years, how much would the depreciation expenseper year be from the expanded building?
Johnson acquired for a lumpsum price of P6,000,000 a piece of land andthe building on it. The land and building have fair values ofP4,2000,000 and P2,800,000 respectively. The building is still usablebut the entity plans to demolish it and construct a new building.Later, total demolition cost incurred was P400,000 but scraps weregathered and sold for P50,000. The new building had a totalconstruction cost of P7,000,000, useful life of 25 years, and asalvage value of P500,000. Question 1. How much is the loss on the retirement of the old building?Question 2. What would be the capitalized cost of the new building?Question 3. What would be the depreciation expense per year for thenew building?Question 4. Assuming that a new wing was constructed 5 years later fora total cost of P1,000,000 and it is expected to have a usefullife of 15 years, how much would the depreciation expenseper year be from the expanded building?
ABC acquired for a lumpsum price of P6,000,000 a piece of land andthe building on it. The land and building have fair values ofP4,2000,000 and P2,800,000 respectively. The building is still usablebut the entity plans to demolish it and construct a new building.Later, total demolition cost incurred was P400,000 but scraps weregathered and sold for P50,000. The new building had a totalconstruction cost of P7,000,000, useful life of 25 years, and asalvage value of P500,000. 1. What is the capitalized cost? 2. How much is the loss on the retirement of the old building? 3. What would be the capitalized cost of the new building? 4. What would be the depreciation expense per year for thenew building? 5. Assuming that a new wing was constructed 5 years later fora total cost of P1,000,000 and it is expected to have a usefullife of 15 years, how much would the depreciation expenseper year be from the expanded building?
ABC acquired for a lumpsum price of P6,000,000 a piece of land and the building on it. The land and building have fair values of P4,2000,000 and P2,800,000 respectively. The building is still usable but the entity plans to demolish it and construct a new building. Later, total demolition cost incurred was P400,000 but scraps were gathered and sold for P50,000. The new building had a total construction cost of P7,000,000, useful life of 25 years, and a salvage value of P500,000. a. How much is the loss on the retirement of the old building? b. What would be the capitalized cost of the new building? c. What would be the depreciation expense per year for the building? d. Assuming that a new wing was constructed 5 years later for a total cost of P1,000,000 and it's expected to have a useful life of 15 years, how much would the depreciation expense per year be from the building?
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At the beginning of the current year, Bert Company purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has extracted all the ore, Bert will be required by law to restore the land to its original condition at an estimated cost of P2,100,000. The present value of the estimated restoration cost is P1,800,000. Bert believed that it will be able to sell the property afterwards for P3,000,000. During the current year, Bert incurred P3,600,000 of development cost preparing the mine for production, removed 80,000 tons of ore and sold 60,000 tons. What total amount of depletion should be recorded for the current year?
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