Cleopatra Company owns a tract of land that it purchased in 2017 for P2,000,000. The land is held as a future plant site and has a fair value of P3,000,000 on July 1, 2020. Caesar Company also owns a tract of land held as a future plant site. Caesar paid P3,600,000 for the land in 2018 and the land has a fair value of P3,800,000 on July 1, 2020. On this date, Cleopatra exchanged its land and paid P1,000,000 cash for the land owned by Caesar. The configuration of cash flows from land acquired is expected to be significantly different from the configuration of cash flows of the land exchanged. At what amount should Cleopatra record the land acquired in the exchange? *
Cleopatra Company owns a tract of land that it purchased in 2017 for P2,000,000. The land is held as a future plant site and has a fair value of P3,000,000 on July 1, 2020. Caesar Company also owns a tract of land held as a future plant site. Caesar paid P3,600,000 for the land in 2018 and the land has a fair value of P3,800,000 on July 1, 2020. On this date, Cleopatra exchanged its land and paid P1,000,000 cash for the land owned by Caesar. The configuration of cash flows from land acquired is expected to be significantly different from the configuration of cash flows of the land exchanged. At what amount should Cleopatra record the land acquired in the exchange? *
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![1 point
Cleopatra Company owns a tract of land that it purchased in 2017 for
P2,000,000. The land is held as a future plant site and has a fair value of
P3,000,000 on July 1, 2020. Caesar Company also owns a tract of land
held as a future plant site. Caesar paid P3,600,000 for the land in 2018 and
the land has a fair value of P3,800,000 on July 1, 2020. On this date,
Cleopatra exchanged its land and paid P1,000,000 cash for the land
owned by Caesar. The configuration of cash flows from land acquired is
expected to be significantly different from the configuration of cash flows
of the land exchanged. At what amount should Cleopatra record the land
acquired in the exchange?
Your answer
1 point
On January 1, 2019, Yolanda Company purchased a plating machine for
P5,400,000. Yolanda received a government grant of P400,000 toward
this capital cost. The machine is to be depreciated using straight line
method with a five year life and no salvage value. The accounting policy is
to treat the government grant as a reduction in the cost of the asset. What
is the carrying amount of the machine on December 31, 2020?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F74e4c722-bcf9-4482-abee-77e59e05e001%2F12445132-9fef-46f0-8840-f5bbcbe7af06%2Fcuerg6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1 point
Cleopatra Company owns a tract of land that it purchased in 2017 for
P2,000,000. The land is held as a future plant site and has a fair value of
P3,000,000 on July 1, 2020. Caesar Company also owns a tract of land
held as a future plant site. Caesar paid P3,600,000 for the land in 2018 and
the land has a fair value of P3,800,000 on July 1, 2020. On this date,
Cleopatra exchanged its land and paid P1,000,000 cash for the land
owned by Caesar. The configuration of cash flows from land acquired is
expected to be significantly different from the configuration of cash flows
of the land exchanged. At what amount should Cleopatra record the land
acquired in the exchange?
Your answer
1 point
On January 1, 2019, Yolanda Company purchased a plating machine for
P5,400,000. Yolanda received a government grant of P400,000 toward
this capital cost. The machine is to be depreciated using straight line
method with a five year life and no salvage value. The accounting policy is
to treat the government grant as a reduction in the cost of the asset. What
is the carrying amount of the machine on December 31, 2020?
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