BAGPIPE MANUFACTURING COMPANY began operations on October 1, 2014. The company’s accountant has started to gather pertinent information about each of the company’s property, plant, and equipment as shown below. When he was about to prepare a schedule of PPE and depreciation, he was assigned to maintain the books of the company’s foreign operations. You have been asked to assist in the preparation of this schedule. In addition to ascertaining that the summarized data below are correct, you have accumulated the following information from the company’s records and personnel.a) b) 9 a) @) 8) Bagpipe computes depreciation from the first of the month of acquisition to the first of the month of disposition. Land A and Building A were purchased .from Pobre Company. Bagpipe paid P12,300,000 for the land and building together. At the time of acquisition, the land had a fair value of P1,350,000 and the building had a fair value of P12,150,000. Land B was acquired on October 3, 2014, in exchange for 37,500 ordinary shares of Bagpipe. On the acquisition date, Land B had a fair value of P1,365,000 and the company’s PS par value ordinary shares had a fair value of P35 per share. Construction of Building B on the newly acquired land began on October 1, 2015. By September 30, 2016, Bagpipe had paid P4,800,000 of the estimated total construction costs of P6,750,000. It is estimated that the building will be completed and occupied by July 2017. Certain equipment was donated to the corporation by the national’ government. An independent appraisal of the equipment when donated placed the fair market value at P450,000 and the salvage value at P45,000. Machinery A’s total cost of P2,473,500 includes installation cost of P9,000 and normal repairs and maintenance of P223,500. Salvage value is estimated at P90,000. It was sold on February 1, 2016, for P1,600,000. On October 1, 2015, Machinery B was acquired with a down payment of P86,100 and the remaining payments to be made in 11 annual installments of P90,000 each, beginning October 1 2015. The prevailing interest rate was 8%. The following data were abstracted from present value tables (rounded):Oyears ilyears 5years Present value of 1at8% (0.463 0.429 0.315 Present value of an ordinary annuity of 1 at 8% 6.710 7.139 8.559 Land A Acquisition date: October 1, 2014 Building A Acquisition date: October 1, 2014 Salvage value: P600,000 Depreciation method: Straight-line Depreciation expense: Year ended Sept. 30, 2015 P261,750 Land B Acquisition date: October 3, 2014 Building B Acquisition date: Under construction Cost: P4,800,000 to date Depreciation method: Straight-line Salvage value: PO Estimated life: 30 years Depreciation expense: Year ended Sept. 30, 2015 PO Donated equipment Acquisition date: October 2, 2014 Salvage value: P45,000 Depreciation method: 150% declining balance Estimated life: 10 yearsMachinery A Acquisition date: October 2, 2014 salvage value: P90,000 Estimated life: 8 years Depreciation method: Sum-of-the years’-digits (SYD) Machinery B Acquisition date: October 1, 2015 Salvage value: PO Depreciation method: Straight-line Estimated life: 20 years 1. Whats the cost of Land A? A. P1,350,000 C. P11,070,000 B. P12,150,000 D. P1,230,000 2. What is the cost of Building A? A. P1,350,000 C. \P11,070,000 B. P12,150,000 D. P1,230,000 3. What is the estimated useful life of Building A? A. 42 years C. 44 years B: 40 years D. 46 years 4. What is the depreciation expense on Building A for the year ended September 30, 2016? A. P261,750 C. P523,500 B. P288,750 . D. P577,500 5. Whats the cost of Land B? A. P1,552,500 C.. P1,365,000 B. P427,500 D. P1,125,000 6. . What is the depreciation expense’ on Building B for the year ended September 30, 2016?A. P120,000 C. P288,750 B. P168,750 D. PO 7. At what amount should the donated equipment be measured and recognized? A. P450,000 C. P495,000 B. P405,000 D. PO 8. What is the depreciation expense on the donated equipment for the year ended September 30, 2015? A. PO C. P60,750 B. P74,250 D. P67,500 9. What is the depreciation expense on the donated equipment for the year ended September 30, 2016? A. P60,750 1G." BS 7,379; B. P51,638 D. P67,500 10. What is the cost of Machinery A? A. P2,473,500 C. P2,160,000 B. P2,250,000 D. P2,151,000 . What is the depreciation expense on Machinery A for the’ year ended September 30, 2015? A. P500,000 C. P480,000 B. P529,667 D. P478,000 1 a 12. What is the depreciation expense on Machinery A for the year ended September 30, 2016? A. P140,000 C. P130,926 B. P113,426 D. P175,000 13. What amount of gain (loss) should be recognized on the sale of Machinery A on February 1, 2016? A. PO Cc. P5,000 B. P60,000 D. P(30,000)14. What is the cost of Machinery B? A. P728,610 C. P780,000 B. P731,670 D. P685,434 45. What is the depreciation expense on Machinery B for the year ended September 30, 2016? A. P36,430 C. P36,584 B. P39,000 D. P34,272