In 2018, Lepanto Mining Company purchased property with natural resources for P28,000,000. The property had a residual value of P5,000,000. However, the entity is required in restore the property to its original condition at a discounted amount P2, 000,000.
Q: Momo Company has a single investment property which had originally cost P2,320,000 on January 1,…
A: Valuation of Investment Assets According to PAS 40 the valuation of the investment assets mainly…
Q: On January 1, 2018, a new building was purchased at a cost of P30 million. Depreciation was computed…
A: Concept: Revaluation surplus will be the differed between carrying amount of the building on…
Q: On December 31, 2021, Purple Company sold a building, receiving as a consideration a P4,000,000…
A: Here in this question, we are required to calculate gain or loss from sale of asset. When any asset…
Q: During 2022, Twenti Company, had the following transactions: On January 2, Twenti purchased the…
A: The non-current assets are charged with their cost of tear & wear annually, sometimes…
Q: What is the depreciation expense for 2024?
A: Sum-of-the-years' digits is an accelerated method for determining an asset's expected depreciation…
Q: Avocado Inc. acquire a machinery at a cost of P10,000,000 on January 1, 2021 to be used in the…
A: The question is related to the Depreciation Accounting. The details are given regarding the same.
Q: XYZ, a manufacturing company, purchases a property for Ghs1m on 1 January 2016 for its investment…
A: Using fair value method, the investment property is remeasure at the end of accounting period. Using…
Q: On January 1, 2019, Minas Company purchased a mining site in the mountains for the extraction of…
A: Decommission liability means the amount of money that needs to spent on return of a developed site…
Q: On January 1, 2020, HOWLSCo. acquired an investment property at a total cost of P25,000,000. At…
A: As per PAS 40" Investment Property" Initial cost of property measured at Cost including transaction…
Q: On Jan. 1, 2016, ABC Corporation bought an equipment for P10,000,000. It has a residual value of…
A: NOTE : As per BARTLEBY guidelines, when multiple sub parts are given then first three sub parts are…
Q: cost model. What amount should be carried in the statement of financial position as investment…
A: Definition: Cost model: It is an accounting policy for reporting the carrying value of the property…
Q: UNDOS COMPANY purchased equipment for P5,000,000 on January 1, 2013 with a useful life of ten years…
A: When an assets cease to be used in regular use and held for sale , then it should be carry at fair…
Q: London Company owns a building on January 1, 2020, with a historical cost of P40,000,000. The…
A: The amount of Revaluation will be credited to revaluation reserve and become a part of other…
Q: Gray Company was granted a patent on January 1, 2018 and appropriately capitalized P450,000 of…
A: On 1st Jan, 2018, patent was capitalized for P 4,50,000. Amortisation per year over its useful life…
Q: On January 1, 2021, CAE Company acquires an asset for $450,000,000. It had to spend an additional…
A: Given: On January 1, 2021, CAE Company acquires an asset for $450,000,000. The amount to be spend is…
Q: carrying amount of the machine as of December 31, 2020
A: As per IAS 8 a change in accounting estimate has to be adjusted prospectively. Accounting estimates…
Q: Robust Company purchased an investment property on January 1, 2019, at a cost of P4,000,000. The…
A: Formula: Depreciation per year = Asset value / Useful life years
Q: The original cost of the properties was P9,000,000 each when they were acquired on January 1, 2015.…
A: The depreciation on investment property is recognized at the fair value over the remaining useful…
Q: On January 1, 2018, an entity purchased a machine for P7,200,000 and depreciated it by the…
A: COST OF PURCHASE OF MACHINE = P7200000 USEFUL LIFE OF ASSET = 8 YEARS METHOD OF DEPRECIATION USED =…
Q: Clara Company purchased equipment for P5,000,000 on January 1, 2021 with a useful lite of 10 years…
A: VALUE OF PROPERTY IMMEDIATELY BEFORE THE CLASSIFICATION AS HELD FOR SALE AS ON 31ST DEC, 2022…
Q: On January 1, 2021, CAE Company acquires an asset for $450,000,000. It had to spend an additional…
A: Part (A) 01-Jan-21 Assets A/c Dr 474000000 To Bank A/c 474000000…
Q: TRUE OR FALSE? Avocado Inc. acquire a machinery at a cost of P10,000,000 on January 1, 2021 to be…
A: Depreciation expense is the reduction in the value of the asset due to its wear and tear.…
Q: On January 1, 2021, CAE Company acquires an asset for $450,000,000. It had to spend an additional…
A: Cost of original asset: Cost of Acquisition + Installation charges = $450 MN + $24 MN = $474 MN…
Q: On January 1, 2023, Stigman Company purchased building at a cost of P10,000,000 with a 10-year…
A: Accumulated Depreciation=CostUseful Life×2 years=P 10,000,00010×2 Years=P 2,000,000
Q: Clara Company purchased equipment for P5,000,000 on January 1, 2021 with a useful life of 10 years…
A: Impairment loss is the decrease in the carrying amount of asset to its recoverable amount.…
Q: Milk Tea Company acquired a property consisting of land and a building through foreclosure on…
A: As per IFRS 5 Non-current assets which are held for sale are to be measured at lower of 1. Fair…
Q: On January 3, 2018, Leni company acquired an item of property, plant and equipment at a cost of…
A: Non-Current assets that are held for sale need to be measured at " Fair value less cost to…
Q: Omar Company owns a property which was revalued to $ 625,000 on 31 December 2018 with a revaluation…
A: From the info given in the question it seems that the company…
Q: On January 1, 2018, CRIMSON Company purchased machineries for P10,560,000 and depreciated it by the…
A: Depreciation is considered as an expense charge on the value of the Asset. It can be calculated by…
Q: Han, Inc. owns a building purchased on January 1, 2016 for P100 million. The building was used as…
A: answerAs per IFRS /IAS An organisation shall transfer a property to, from investment property only…
Q: In June 2023, Plane Company exchanged an old packaging machine, which had a cost ofP1,200,000 and…
A: Cost of old packaging machine= P1,200,000 Depreciation= 50% Market value of the old packaging…
Q: The journal entry to record the machinery as held for sale would require a credit to Machinery of…
A: Machinery is a type of asset which falls normally under the category of the fixed assets which is…
Q: PT Adista owns land that was purchased in cash on January 2, 2018 at a cost of IDR 1,000,000,000.…
A: There are two methods for subsequent accounting of the fixed assets; which are, Cost model and the…
Q: Nona Co. purchased land worth P20,000,000 on January 1, 2021. The company uses the revaluation model…
A: Impairment of assets means reducing the book value of assets when carrying amount is more than…
Q: .In Jan of 2018, Entity D purchased a patent at a cost of P200,000. Legal and filing fees of P50,000…
A: solution given Purchase cost 200000 Legal and filing fees 50000 Estimated life 10…
Q: Clara Company purchased equipment for P5,000,000 on January 1, 2021 with a useful life of 10 years…
A: Introduction Decrease in value of assets due to obsolete and old condition this decrease in asset…
Q: On January 1,2015, ABC Corporation acquired a building at a cost of P 22,000,000. The building has…
A: Annual depreciation = (Cost of the assets - residual value)/ life of the assets = (P22,000,000 -…
Q: In 2022, Leo construction traded in a light duty pickup truck that had a book value of $18,000. A…
A: In 2022, Leo construction bought a light duty pickup truck having a fair market value of $55,236.…
Q: Johnson Company purchased an equipment at P6,500,000 on January 1, 2020 which will be used for a…
A: Revaluation Model In the revaluation model the determination of assets value will be determined by…
Q: On January 1,2015, ABC Corporation acquired a building at a cost of P 22,000,000. The building has…
A: Annual depreciation = (Cost of the assets - residual value)/ life of the assets = (P22,000,000 -…
Q: Jessie Company purchased an investment property on January 1, 2020 at a cost of P2,200,000. The…
A: Given information, Cost of the property =P2,200,000 Fair value of the property =P3,000,000 Useful…
Q: Clara Company purchased equipment for P5,000,000 on January 1, 2021 with a useful lite of 10 years…
A: Recoverable Value of the Equipment on December 31, 2022 = Fair Value - Cost of disposal…
Q: Muskoko Inc. purchased a property for $1.800,000 in 2022. The carrying value of property was…
A: Correct option: B. Impairment loss of $ 250,000 Incorrect options: A. Impairment gain of $ 550,000…
Q: ABC Compant purchased an investment property on July 1, 2016 for P4,200,000. The property had a…
A: This question deals with the IAS 40 "Investment property". Investment property is a land or building…
Q: Clara Company purchased equipment for P5,000,000 on January 1, 2021 with a useful life of 10 years…
A: Recoverable value = Fair value less cost of disposal for December 2022 = P3300,000 - P100,000 =…
Q: Clara Company purchased equipment for P5,000,000 on January 1, 2021 with a useful lite of 10 years…
A: Recognized gain/loss = P3,800,000 - P200,000 = P3,600,000
Q: Corning Industries owns a patent for which it paid $77,000. At the end of the current year,…
A: Introduction: Corning Industries hold a patent that costs $77,000 to acquire. At the end of the…
Q: On July 15, 2018, Cottonwood Industries sold a patent and equipment to Roquemore Corporation for…
A: Gain (Loss) on sale of patent = Sale value - Book value = $750,000 - $120,000 = $630,000 Gain…
Q: On January 1, 2020, A Company decided to sell one of its machineries with a cost of P3,400,000 and…
A: When the assets are categorised as held for sale, the net realisable value is considered for…
Q: Jasmin Company purchased an investment property on January 1, 2017 at a cost of P2,200,000. The…
A: Cost of investment property = 2200000 Use ful life = 40 years Deprecation for 2 years =2200000/40…
Step by step
Solved in 3 steps with 1 images
- The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
- Tree Lovers Inc. purchased 100 acres of woodland in which the company intends to harvest the complete forest, leaving the land barren and worthless. Tree Lovers paid $2,100,000 for the land. Tree Lovers will sell the lumber as it is harvested and expects to deplete it over five years (twenty acres in year one, thirty acres in year two, twenty-five acres in year three, fifteen acres in year four, and ten acres in year five). Calculate the depletion expense for the next five years and create the journal entry for year one.Comprehensive: Acquisition, Subsequent Expenditures, and Depreciation On January 2, 2019, Lapar Corporation purchased a machine for 50,000. Lapar paid shipping expenses of 500, as well as installation costs of 1,200. The company estimated that the machine would have a useful life of 10 years and a residual value of 3,000. On January 1, 2020, Lapar made additions costing 3,600 to the machine in order to comply with pollution-control ordinances. These additions neither prolonged the life of the machine nor increased the residual value. Required: 1. If Lapar records depreciation expense under the straight-line method, how much is the depreciation expense for 2020? 2. Assume Lapar determines the machine has three significant components as shown below. If Lapar uses IFRS, what is the amount of depreciation expense that would be recorded?Investment Property Determine the cost of the following items of investment acquired by Sasha Corporation during 2022; Land site for capital appreciation was acquired for P8,600,000. The company paid P430,000 commission to a real estate agent. Costs of P 135,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P 65,000. The cost of investment property is _____________ Land and building were acquired to be held for under operating leases. The company made a de payment of P4,000,000, issued 20,000 P200 par ordinary shares with a market price of P240 per share, and issued a three-year non-interest-bearing note for P6,000.000 note is payable in equal annual installments of P2,000,000 at the end of each year from the date of purchase. The prevailing interest rate for similar notes is 10%. 30% of the purchase price is allocated to the land. Investment property is recorded at __________
- Determine the cost of the following items of investment acquired by Sasha Corporation during 2022;a. Land site for capital appreciation was acquired for P8,600,000. The company paid P 430,000 commission to a real estate agent. Costs of P 135,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P 65,000. The cost of investment property is _____________b. Land and building were acquired to be held for under operating leases. The company made a de payment of P4,000,000, issued 20,000 P200 par ordinary shares with market price of P240 per share and issued three year non-interest bearing note for P6,000.000 note is payable in equal annual instalments of P2,000,000 at the end of each year from the date of purchase. Prevailing interest rate for similar notes is 10%. 30% of the purchase price is allocated to the land. Investment property is recorded at __________Required information [The following information applies to the questions displayed below.] On January 1, Mitzu Company pays a lump-sum amount of $2,750,000 for land, Building 1, Building 2, and Land Improvements 1. Building 1 has no value and will be demolished. Building 2 will be an office and is appraised at $750,000, with a useful life of 20 years and a $85,000 salvage value. Land Improvements 1 is valued at $420,000 and is expected to last another 14 years with no salvage value. The land is valued at $1,830,000. The company also incurs the following additional costs. Cost to demolish Building 1 Cost of additional land grading Cost to construct Building 3, having a useful life of 25 years and a $400,000 salvage value Cost of new Land Improvements 2, having a 20-year useful life and no salvage value 3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets wer in use. View transaction list No Date View journal…In 2018, Lepanto Mining Company purchased property with natural resources for P28,000,000. The property had a residual value of P5,000,000. However, the entity is required in restore the property to its original condition at a discounted amount P2, 000,000. In 2018, Lepanto spent P1,000,000 for development cost and P3,000,000 for a building on the property. Lepanto does not anticipate that the building will have utility after the natural resources are removed. In 2019, at amount of P1,000,000 was spent for additional development on the mine. That tonnage mined and estimated remaining tons for 2018, 2019 and 2020 are as follows: TONS EXTRACTED TONS REMAINING 2010 10,000,000 7,000,000 2011 2012 3,000,000 3,500,000 2,500,000 REQUIRED: Compute the depletion for 2018, 2019 and 2020 and prepare all necessary journal entries.
- 1. E. Adentwi Enterprises Ltd bought a machine for GH₵ 150,000 on 1st January 2019. It depreciates the machine on cost over four years assuming a nil residual value.The company received a grant of GH₵30,000 from the municipal assembly to support the acquisition of the machines. required :Account for this grant under the netting off method. 2. Polycarp Ltd adopts revaluation model for subsequent measurement of its intangible assets in accordance with IAS 38: Intangible assets. The policy of Polycarp is to revalue its intangible asset at the end of each year. An intangible asset with an estimated useful life of 9 years was acquired on 1 January 2018 for GH¢45,000. It was revalued to GH¢54,400 on 31 December 2018 and the revaluation surplus was correctly recognized on that date. As at 31 December 2019, the asset was revalued at GH¢32,000.Required:Discuss the accounting treatment required in 2018 and 2019 financial statements.Required information [The following information applies to the questions displayed below.] On January 1, Mitzu Company pays a lump-sum amount of $2,750,000 for land, Building 1, Building 2, and Land Improvements 1. Building 1 has no value and will be demolished. Building 2 will be an office and is appraised at $690,000, with a useful life of 20 years and a $70,000 salvage value. Land Improvements 1 is valued at $570,000 and is expected to last another 19 years with no salvage value. The land is valued at $1,740,000. The company also incurs the following additional costs. Cost to demolish Building 1 Cost of additional land grading Cost to construct Building 3, having a useful life of 25 years and a $400,000 salvage value Cost of new Land Improvements 2, having a 20-year useful life and no salvage value =quired: Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Allocation of Purchase Price and uilding 2 and Improvements 1 tals urchase Price emolition…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?