MAGANDANGEHEMPLO, Inc. obtained a land with an old building, that will be accounted for under property, plant and equipment. The Company intends to demolish the old building, to build a new building and will not use the old building prior to its demolition. The following information relates to the land and building: Purchase price of the land and building P3,500,000 Fair value: Land 3,000,000 Old building 2,000,000 Historical cost Land 2,000,000 Old building 6,000,000 Demolition costs 700,000 Construction cost of the new building 15,000,000 Which of the following statements are true? O The cost of land is deemed to be P2.800,000. O The Company will recognize P1,400.000 as part of its buildings, under property. plant and equipment, prior to demolition. O The amount of expense to be recognized is P2.100.000. Which is the demolition costs and the carrying value of the old building. O The cost of the new building is P17,100.000 million.

MAGANDANGEHEMPLO, Inc. obtained a land with an old building, that will be accounted for under property, plant and equipment. The Company intends to demolish the old building, to build a new building and will not use the old building prior to its demolition. The following information relates to the land and building: Purchase price of the land and building P3,500,000 Fair value: Land 3,000,000 Old building 2,000,000 Historical cost Land 2,000,000 Old building 6,000,000 Demolition costs 700,000 Construction cost of the new building 15,000,000 Which of the following statements are true? O The cost of land is deemed to be P2.800,000. O The Company will recognize P1,400.000 as part of its buildings, under property. plant and equipment, prior to demolition. O The amount of expense to be recognized is P2.100.000. Which is the demolition costs and the carrying value of the old building. O The cost of the new building is P17,100.000 million.

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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Coco de Coco Company acquired forest assets for a basket price of P 30,000,000 which is equal to the lump-sum value of the following group of assets with their respective fair value less point of sell costs: Coconut trees (5,000 trees) P 12,500,000 Land under trees P 5,000,000 Roads in forest P 2,500,000 What amount should the biological asset be initially recorded? What amount should the noncurrent non-depreciable asset be initially recorded? What amount should the noncurrent depreciable asset be recorded?
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homework i Carver Incorporated purchased a building and the land on which the building is situated for a total cost of $846,300 cash. The land was appraised at $194,649 and the building at $778,596. Required: a. What is the accounting term for this type of acquisition? b. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building. c. Would the company recognize a gain on the purchase? d. Record the purchase in a horizontal statements model. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Check my work Record the purchase in a horizontal statements model. Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar. In the Statement of Cash Flows column, use the initials OA to designate operating IA for investing activity, FA for financing activity, NC for net change in cash and NA for not affected. Enter any decreases to account balances and…
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From page 7-2 of the VLN, intangible assets are long term assets and would NOT include: Group of answer choices A. Goodwill B. Natural gas C. Patents D. Copyrights
Purchased for P5,500,000, including appraiser fee of P100,000´a warehouse building and the land on which it is located. The land had an appraised value of P2,000,000 and original cost of P1,400,000. The building had an appraised value of P3,000,000 and original cost of P2,500,000. 4. Purchased an office building and the land on which it is located for P7,500,000 cash and assumed an existing P2,500,000 mortgage. For realty tax purposes, the property is assessed at P9,600,000, 60% of which is allocated to building. Required: Prepare journal entries to record the transactions for the current year.
17.ABC Company acquired a tract of land containing an extractable natural resource. ABC Co. is required by the purchase contract to restore the land to a condition suitable for recreational use after extraction of the natural resource. Geological surveys estimated that the recoverable reserves will be 200,000 tons and that the land will have a value of P1,000,000 after restoration. Relevant costs information are the following: Land acquisition cost P8,000,000; Estimated restoration cost P500,000; Development and geological surveys cost P1,500,000. What should be the depletion rate per ton of resource?
ABC acquired for a lumpsum price of P6,000,000 a piece of land andthe building on it. The land and building have fair values ofP4,2000,000 and P2,800,000 respectively. The building is still usablebut the entity plans to demolish it and construct a new building.Later, total demolition cost incurred was P400,000 but scraps weregathered and sold for P50,000. The new building had a totalconstruction cost of P7,000,000, useful life of 25 years, and asalvage value of P500,000. 1. What is the capitalized cost? 2. How much is the loss on the retirement of the old building? 3. What would be the capitalized cost of the new building? 4. What would be the depreciation expense per year for thenew building? 5. Assuming that a new wing was constructed 5 years later fora total cost of P1,000,000 and it is expected to have a usefullife of 15 years, how much would the depreciation expenseper year be from the expanded building?
Determining the Cost of an AssetOmar Corporation paid $200,000 for a tract of land that had an old gas station on it. The gas station was demolished at a cost of $20,000 and a new warehouse was constructed on the site at a cost of $550,000. In addition, several other costs were incurred: Legal fees (associated with the purchase of the land) $35,000 Architect fees (associated with the new warehouse) $42,000 Interest on the construction loan (for the new warehouse) $18,000 (a) What value should be assigned to the tract of land? $Answer (b) What value should be assigned to the new warehouse? $Answer
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