On April 27, 2021, BatoBatoPik purchased for P6,000,000 a warehouse building and the land on which it is located. The following data were available concerning the property: Current Appraised Original Cost Value Land P2,200,000 P1,800,000 Warehouse P3,300,000 P3,000,000 Total P5,500,000 P4,800,000 At what amount should the warehouse be recorded?

On April 27, 2021, BatoBatoPik purchased for P6,000,000 a warehouse building and the land on which it is located. The following data were available concerning the property: Current Appraised Original Cost Value Land P2,200,000 P1,800,000 Warehouse P3,300,000 P3,000,000 Total P5,500,000 P4,800,000 At what amount should the warehouse be recorded?

Name: On April 27, 2021, BatoBatoPik purchasedfor P6,000,000 a warehouse bu
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Description: On April 27, 2021, BatoBatoPik purchasedfor P6,000,000 a warehouse building and theland on which it is located. The followingdata were available concerning the property:CurrentAppraised Original CostValueLandP2,200,000P1,800,000WarehouseP3,300,000P3

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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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Question

On April 27, 2021, BatoBatoPik purchased
for P6,000,000 a warehouse building and the
land on which it is located. The following
data were available concerning the property:
Current
Appraised Original Cost
Value
Land
P2,200,000
P1,800,000
Warehouse
P3,300,000
P3,000,000
Total
P5,500,000
P4,800,000
At what amount should the warehouse be
recorded?

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