PILAK Mining Company has a copper mine in Marinduque. The company is subject to the pronouncements of the International Accounting Standards Board, and, specifically, IFRS 16. The plant and equipment used in this operation were acquired five years ago for P1,600,000 and have been depreciated using straight-line depreciation over a 20-year life. The controller estimates that the assets have a remaining useful life of 15 years. The controller of the company is preparing the financial statements for the year just ended and notes that the fair value of the plant and equipment is estimated to be P1,300,000 at the close of last year. Prepare the entry (if any) the controller should make under IFRS 16 relating to the current fair value of the plant & equipment. Additionally, assume that the company sold the plant & equipment for P1,300,000 immediately after the end of last уcar. Prepare the entry (if any) required under IFRS 16.

PILAK Mining Company has a copper mine in Marinduque. The company is subject to the pronouncements of the International Accounting Standards Board, and, specifically, IFRS 16. The plant and equipment used in this operation were acquired five years ago for P1,600,000 and have been depreciated using straight-line depreciation over a 20-year life. The controller estimates that the assets have a remaining useful life of 15 years. The controller of the company is preparing the financial statements for the year just ended and notes that the fair value of the plant and equipment is estimated to be P1,300,000 at the close of last year. Prepare the entry (if any) the controller should make under IFRS 16 relating to the current fair value of the plant & equipment. Additionally, assume that the company sold the plant & equipment for P1,300,000 immediately after the end of last уcar. Prepare the entry (if any) required under IFRS 16.

Name: PILAK Mining Company has a copper mine inMarinduque. The company is s
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: PILAK Mining Company has a copper mine inMarinduque. The company is subject to the pronouncementsof the International Accounting Standards Board, and,specifically, IFRS 16.The plant and equipment used in this operation wereacquired five years ago fo

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Ashvinn
A company purchased a piece of equipment for $120,000 and estimated that the asset will have no salvage value t the end of its 15-year useful life. At the end of Year 5 of ownership, when accumulated depreciation was $40,000 and the asset's book value was $80,000, the company revised the asset's estimated useful life to a total of 10 years. What is the appropriate accounting treatment beginning with Year 6? O The equipment will depreciate $40,000 over the next 10 years. O The equipment will depreciate $80,000 over the next 10 years. O The equipment will depreciate $40,000 over the next five years. O The equipment will depreciate $80,000 over the next five years.
On January 1,2013, GRACE Company acquired a bakery equipment at a cost of $650,000. The equipment is being depreciated using straight-line method over its estimated useful life of 10 years. On December 31,2016, a determination was made that the asset's recoverable amount was only $240,000. On December 31,2018, the asset's recoverable amount was determined to be $270,000 and the management believes that the impairment previously recognized should be reversed. How much impairment loss should be recognized on December 31,2016?
ABC Company finds its records are incomplete concerning a piece of equipment used in its plant. According to the company records, the equipment has an estimated useful life of 10 years and an estimated salvage value of Php24,000. It has recorded Php12,000 in depreciation each year using the straight-line method. If the accumulated depreciation account shows a balance of Php72,000, what is the original cost of the equipment and how many years remain to be depreciated?
Montana Mining Company pays $4,771,370 for an ore deposit containing 1,502,000 tons. The company installs machinery in the mine costing $214,200. Both the ore and machinery will have no salvage value after the ore is completely mined. Montana mines and sells 150,100 tons of ore during the year. Prepare the December 31 year-end entries to record both the ore deposit depletion and the mining machinery depreciation. Mining machinery depreciation should be in proportion to the mine's depletion. Note: Do not round intermediate calculations. Round your final answers to the nearest whole number. View transaction list Journal entry worksheet Credit View general Journal
Several years ago, a company acquired an asset at a cost of $400,000. Last year, the company recognized an impairment loss of $25,000 and properly reduced the asset's book value from $250,000 to $225,000. Using the asset's new base of $225,000, the company calculates depreciation for the current year to be $10,000, bringing the book value down to $215,000. However, the company has also determined that the asset's fair value has recovered and is now estimated to be $260,000. How should the company measure the asset on its current balance sheet? O The company should reverse the prior impairment and measure the asset at its fair value prior to the initial impairment of $250,000. O The company should not reverse the impairment and should depreciate the asset by $10,000 to a new book value of $215,000. The company should not reverse the impairment and should not depreciate the asset further, leaving the book value at $225,000. O The company should reverse the prior impairment and measure…
Use this information to answer the following 12 questions: Jefferson Company acquired equipment on January 2, Year 1, at a cost of $10 million. The equipment has a five-year life, no residual value, and is depreciated on a straight-line basis. On January 2, Year 3, Jefferson Company determines the fair value of the asset (net of any accumulated depreciation) to be $12 million. Determine the impact the equipment has on Jefferson Company's income in Year 1 using IFRS, assuming the revaluation method is used for measurement subsequent to initial recognition.
In January, 2004, Nixon Corporation purchased a mineral mine for P6,800,000 with removable ore estimated by geological surveys at 2,000,000 tons. The property has an estimated value of P400,000 after the ore has been extracted. The company incurred P2,000,000 of development costs preparing the mine for production. During 2004, 500,000 tons were removed and 400,000 tons were sold. What is the amount of depletion that Nixon should expense for 2004? P1,280,000 OP2,240,000 P1,680,000 OP1,600,000
Merca Inc. has provided the auditors with the ff. information: - A patent was purchased on January 1, 2015 from Seagull Co. for 6,000,000. Estimated useful life is 10 years. The patent had a net book value of P6,000,000 when Merca bought it from Seagull. Because of recent events, Merca decides that a change in estimated useful life of intangible assets is necessary. Therefore on January 1, 2016, the remaining useful life of the patent purchased on January 1, 2015, is only 5 years from January 1, 2016. -A franchise was purchased on February 1, 2016 for P1,440,000. The contract was for 20 years and terms include 5% revenue from franchise must be paid to the franchisor. Revenue for 2016 was P7,500,000. -The ff. research and development costs were incurred by Merca in 2016: Materials and equipment 426,000 Personnel 567,000 Indirect costs 306,000 1. On December 31, 2016, the carrying amount of the patent should be: a. 4,320,000 b. 4,920,000 c. 4,800,000 d. 4,400,000 2.…
During the reporting period ending 30 June 2014, Sara Limited erected an oil rig in Noosa River. The cost of the rig and associated technology amounted to $99 000 000. The oil rig commenced production on 1 July 2014. At the end of the rig’s useful life, which is expected to be five (5) years, Sara Limited is required by its resource consent to dismantle the oil rig, remove it, and return the site to its original condition. After consulting its own engineers and environmentalists, Sara Limited estimates that if such work was required to be done at the present time it would cost $14 999 995. If we accept that the rate on 5-year government bonds reflects the relevant time value of money, and if the rate is 4 per cent annually, calculate the present value of the restoration provision which would be today.