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    Third Exam Quizzer

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    Kate Fernandez
    Melancholy Company acquired additional land for $1,250,000 and a plant facility through an exchange of shares valued at $1,000,000 for land and $3,000,000 for the building. It also incurred $750,000 in improvements. The total costs of land, buildings, and improvements as of year-end are $7,650,000, $10,000,000, and $750,000 respectively.

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    Third Exam Quizzer

    Uploaded by

    Kate Fernandez
    125 views1 page
    Melancholy Company acquired additional land for $1,250,000 and a plant facility through an exchange of shares valued at $1,000,000 for land and $3,000,000 for the building. It also incurred $750,000 in improvements. The total costs of land, buildings, and improvements as of year-end are $7,650,000, $10,000,000, and $750,000 respectively.

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    Melancholy Company acquired additional land for $1,250,000 and a plant facility through an exchange of shares valued at $1,000,000 for land and $3,000,000 for the building. It also incurred $750,000 in improvements. The total costs of land, buildings, and improvements as of year-end are $7,650,000, $10,000,000, and $750,000 respectively.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    125 views1 page

    Third Exam Quizzer

    Uploaded by

    Kate Fernandez
    Melancholy Company acquired additional land for $1,250,000 and a plant facility through an exchange of shares valued at $1,000,000 for land and $3,000,000 for the building. It also incurred $750,000 in improvements. The total costs of land, buildings, and improvements as of year-end are $7,650,000, $10,000,000, and $750,000 respectively.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Melancholy Company reported the following property, plant and equipment on January 1 2019:

    Land 3,500,000
    Land improvements 900,000
    Building 7,000,000

    The following transactions occurred during the current year.

    a. A tract of land was acquired for P1,250,000 and intended definitely for use as future building site.

    b. A plant facility consisting land and building was acquired from another entity in exchange for 100,000
    Melancholy shares.

    On the acquisition date, the share had a closing market price of P45 on a stock exchange. The plant
    facility was carried at P1,000,000 for land and P3,000,000 for the building at the exchange date. Current
    appraised values for land and building respectively are P1,200,000 and P2,400,000.

    c. Expenditures totaling P750,000 were made in January 2019 for new parking lot, street and sidewalk a
    the entity’s various plant locations. These expenditures had an estimated useful life of fifteen years.

    Required:
    1. Compute the total cost of land as part of PPE.
    2. Compute total cost of building.
    3. Compute total cost of land improvements.

    Tiger Company received a government grant related to depreciable asset five years ago on January 1,
    2014 in the amount of P1,000,000. The grant was deducted from the capital cost of the asset purchased
    at a total amount of P6,000,000 on the same date with a useful life of 10 years and no residual value. On
    January 2019, the entire P1,000,000 became repayable due to lack of compliance with the conditions
    attached to the grant. What total amount should be recognized as depreciation expense for 2019?

    Innuendo Company had the following loans outstanding for the entire year 2019:

    Specific construction loan 1,000,000 10%


    General loan 20,000,000 12%

    The entity began the self-construction of a building on January 1, 2019 and the building was completed
    on December 31, 2014. The following expenditures were made during the current year:

    January 1 1,000,000 Required: Compute the cost of new building.


    July 1 2,000,000
    November 1 3,000,000
    Total 6,000,000

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