Acquired a tract of land with an existing building in exchange for 50,000 ordinary shares of P100 par value with a market price of P120 per share on the date of acquisition. The last property tax bill indicated assessed value of P2,800,000 for the land and P1,200,000 for the building. However, the land has a fair value of P5,500,000 and the building has no determinable fair value. Shortly after acquisition, the building was razed at a cost of P100,000 in anticipation of a new building construction. • Received land from a major shareholder as an inducement to locate a plant in the city. No payment was requir

Acquired a tract of land with an existing building in exchange for 50,000 ordinary shares of P100 par value with a market price of P120 per share on the date of acquisition. The last property tax bill indicated assessed value of P2,800,000 for the land and P1,200,000 for the building. However, the land has a fair value of P5,500,000 and the building has no determinable fair value. Shortly after acquisition, the building was razed at a cost of P100,000 in anticipation of a new building construction. • Received land from a major shareholder as an inducement to locate a plant in the city. No payment was requir

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 62P

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Paula Company had the following property acquisitions during the current year: Acquired a tract of land and building in exchange for 50,000 ordinary shares of P100 par value with a market price of P120 per share on the date of acquisition. The last property tax bill indicated an assessed value of P1,200,000 for the land and P2,800,000 for the building. However, the land has a fair value of P2,000,000 and the building has a fair value of P3,500,000. Received land from a major shareholder as an inducement to locate the plant in the city. No payment was required but the entity paid P50,000 for legal expenses for land transfer. The land is fairly valued at P1,000,000. Acquired a welding machine with an invoice price of P3,000,000 subject to a cash discount of 10% which was not taken. The entity incurred cost of P50,000 in removing the old welding machine prior to the installation of the new one. Welding supplies were acquired at a cost of P150,000. What is the total increase in property,…
Garrett Corporation paid $200,000 to acquire land, buildings, and equipment. At the time of acquisition, Garrett paid $20,000 for an appraisal, which revealed the following values: land, $100,000; buildings, $125,000; and equipment, $25,000. Required: 2. Assume that Garrett uses IFRS and chooses to use the revaluation model to value its property, plant, and equipment. At the end of the year, the book value of the land, buildings, and equipment are $88,000, $105,000, and $19,000, respectively. The company determines that the fair value of the land, buildings, and equipment at the end of year is $113,000, $107,000, and $16,000, respectively. Prepare the journal entries that Garrett should make to value its property, plant, and equipment.
Paula Company had the following property acquisitions during the current year: Acquired a tract of land and building in exchange for 50,000 ordinary shares of P100 par value with a market price of P120 per share on the date of acquisition. The last property tax bill indicated assessed value of P1,200,000 for the land and P2,800,000 for the building. However, the land has a fair value of P2,000,000 and the building has fair value of P3,500,000. Received land from a major shareholder as an inducement to locate a plant in the city. No payment was required but the entity paid P50,000 for legal expenses for land transfer. The land is fairly valued at P1,000,000. • Acquired a welding machine with an invoice price of P3,000,000 subject to a cash discount of 10% which was not taken. The entity incurred cost of P50,000 in removing the old welding machine prior to the installation of the new one. Welding supplies were acquired at a cost of P150,000. What is the total increase in property, plant…
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