5. A Construction firm bought one (1) unit Luffer type50 Tons capacity tower crane and one(1) unit twincage hoist elevator for their high rise building projectfor P 6,000,000. Freight and installation costamounted to 3% of the original price. If the equipmentshall be depreciated over a period of 20 years at asalvage value of 5%. What is the book value at the endof 13 years using the following method;Declining balance methoda. P 881,696.22b. P810,135.12с. Р918,520d. P 741,200.08Double declining balance methoda. P 1,427,354b. P1,430,455c. P 1,570,873d. P 1,415,200Sinking fund method at 12% interesta. P 3,727,354b. P 3,950,558c. P 3,896,123d. P 401,200SYD methoda. P 1,091,800b. P1, 123,215c. P 1,290,520d. P1,141,200

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Answered: 5. A Construction firm bought one (1)…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mang Juan purchased an equipment for its manufacturing plant that costs PhP 3,750,000 + 10,000(x). It is estimated to have a useful life of 20 years; scrap value of PhP 375,000, production of 12,345,678 + 15,000(x) units and working hours of 100,000 + 1,500(x) hours. The company uses the equipment for 7,884 hours and produced 876,543 units on the first year and 7,883 hours and produced 987,654 units on thesecond year. Solve for the following: x=09 Sum of Years Digit Method -book value at the end of the 2nd year
Global Traders purchases a piece of equipment for $1.5 million and incurs the following expenses: Freight charges = $250,000 Installation charges = $25,000 Cost of training machine maintenance staff = $12,000 Cost of strengthening the factory floor = $5,500 Cost of painting factory walls = $7,000 The amounts capitalized and expensed by the company are closest to: Balance Sheet ($) A 1,775,000 B 1,780,500 C 1,792,500 O Row B Row C Row A Income Statement ($) 24,500 19,000 7,000
AEC purchased an equipment for its manufacturing plant that costs PHP 3, 750 000 + PHP 10,000 x (01). It is estimated to have a useful life of 20 years; scrap value of PHP 375, 000, production of 12,345,678 + 15,000 x (01) units and working hours of 100,000 + 1,500 hours x (01). The company uses the equipment for 7,884 hours and produced 876,543 units on the first year and 7,883 hours and produced 987,654 units on the second year. Solve for the following: c. Service Output Method- Book value at the end of the 2nd year
3.XYZ drilling company purchased a high-end CNC milling center at $500,000 two years ago. The expected life of this machine is 10 years and the salvage value at that time $100,000. The company has done a major upgrading for the CNC machine last year, costed $15,000. The company has also spent $150,000 on its material handling system including a docking station, a rotation table, two pallets and an automatic loading/unloading robot arm. The CNC operating cost is $45,000 per year. Due to the recent oil price down turn this year, the company is contemplating to change the business to truck repair, and considering to replace the said CNC machine with a truck repair elevation platform. The current market value for the CNC machine is $250,000; while the supporting machinery would be valued very little, only $10,000, due to their specific functionality and the bad economy situation.What is the total sunk cost related to this replacement decision? Select one: a. $100,000 cross out b. $505,000…
The Market Company won a contract to build a shopping center at a price of $300 million. The following schedule details the estimated and actual costs of construction each year as well as the total estimated cost. What amount of revenue will be recognized in Yr. 1 using the percentage completion method? Yr 1 $40,000,000 Yr. 2 $60,000,000 Yr. 3 $70,000,000 Yr. 4 $30,000,000 Total $200,000,000 Select one: a. $60,000,000 b. $50,000,000 c. $0 d. $40,000,000 e. $300,000,000
3. A food processing plant consumed 600,000 kWh of electric energy annually and pays an average of Php 1.00/kWh. A study is being made to generate its own power to supply the plant's energy requirement. The power plant installed would cost Php 1,500,000. Annual operation and maintenance, Php 350,000. Other expenses, Php 85,000 per year. Life of power plant is 15 years. The salvage value ate the end of life is Php 350,000. Annual taxes and insurance, 4% of the first cost. The rate of interest is 12%. Using the sinking fund method for depreciation, determine if the power plant is justifiable. Use Rate of Return (ROR) method and Annual Worth (AW) method. If the calculations predicted that the plant is a good investment, when will the payback period be?
Question 2. Using terms of 2/10 and n/30, Granite Company spent $133,000 on a machine. The equipment was delivered FOB the shipment location, and the freight charged $3,300. Special installation and electrical connections for the machine are necessary and will cost $11,300. Damages of $2,800 were incurred during equipment installation. Assuming Granite paid during the discount period, calculate the cost reported for this machine. A. $163,000. B. $154,140. C. $150,340. D. $154,440. E. $144,940.
This question relate with MFRS 116 (Property, Plant and Equipment)
Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $229,500. Project 2 requires an initial investment of $156,000. Annual Amounts Project 1 Project 2 Sales of new product $ 148,000 $ 128,000 Expenses Materials, labor, and overhead (except depreciation) 77,000 44,000 Depreciation—Machinery 32,000 30,000 Selling, general, and administrative expenses 20,000 32,000 Income $ 19,000 $ 22,000 (a) Compute each project’s annual net cash flow.(b) Compute payback period for each investment.
A company purchased an equipment for its manufacturing plant that costs PhP 3,750,000 + 10,000(x). It is estimated to have a useful life of 20 years; scrap value of PhP 375,000, production of 12,345,678 + 15,000(x) units and working hours of 100,000 + 1,500(x) hours. The company uses the equipment for 7,884 hours and produced 876,543 units on the first year and 7,883 hours and produced 987,654 units on thesecond year. Solve for the following: x=09 SInking Fund Method (i=8%) -book value at the end of the 1st year
4- A storage company constructed a small building to store its unused vehicles and other moveable assets. The costs incurred in constructing the building include the following: Contractor's costs Direct materials and labour Technical overheads General administrative overheads Interest costs in financing the construction RM 300,000 50,000 12,520 8,000 3,000 373,520 The company purchased RM 50,000 of materials for the construction: however due to technical inaccuracies in estimating the necessary number of materials for the construction, only RM 48,000 of materials were used. In addition, during the construction, several labours were affected with an infectious disease. The disease had disrupted the construction and cost the company a further RM 15,000. Determine the cost of the building for capitalization.
(a) Niasha Stores recently imported an item of plant from Grenadines Plants Ltd. The following information has been made available with regards to the purchase: Details $ Basic list price 3,000,000 Other costs: Transportation and handling 100,000 Pre-production testing 200,000 Holding structure for plant 350,000 Electrical inputs for plant 120,000 Own labour costs 250,000 Estimated maintenance costs for 5 years 300,000 The plant is expected to be useful for 8 years. At the end of this time, it will cost $180,000 to dismantle the plant and $140,000 to restore the site to its original state and use. Trade discount applicable to the purchase of the plant was 15% on the list price. Niasha Stores had made an error in purchasing electrical inputs amounting to $20,000. This cost was included in the above figure. In order to get the plant into the country Niasha Stores was charged 20% import duties on the basic list price. Niasha…

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5. A Construction firm bought one (1) unit Luffer type 50 Tons capacity tower crane and one(1) unit twin cage hoist elevator for their high rise building project for P 6,000,000. Freight and installation cost