Problem 27-27 (AICPA Adapted) At the beginning of current year, Obvious Company provided the following: Accumulated depreciation Cost Land Building Machinery and equipment 875,000 7,500,000 2,250,000 1,644,500 635,000 Building – double declining balance, 25 years Machinery and equipment – Straight line, 10 years Land improvements – Straight line - On January 1, a plant facility consisting of land and building was acquired from another entity in exchange for 25,000 shares of Obvious Company. *
Problem 27-27 (AICPA Adapted) At the beginning of current year, Obvious Company provided the following: Accumulated depreciation Cost Land Building Machinery and equipment 875,000 7,500,000 2,250,000 1,644,500 635,000 Building – double declining balance, 25 years Machinery and equipment – Straight line, 10 years Land improvements – Straight line - On January 1, a plant facility consisting of land and building was acquired from another entity in exchange for 25,000 shares of Obvious Company. *
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 27-27 (AICPA Adapted)
At the beginning of current year, Obvious Company provided
the following:
Accumulated
depreciation
Cost
875,000
7,500,000
2,250,000
Land
Building
Machinery and equipment
1,644,500
635,000
Building – double declining balance, 25 years
Machinery and equipment – Straight line, 10 years
Land improvements - Straight line
On January 1, a plant facility consisting of land and building
was acquired from another entity in exchange for 25,000
shares of Obvious Company.
On this date, the share had a market price of P50. Current
zonal values of land and building for property tax purposes-
are P150,000 and P600,000, respectively.
On March 31, new parking lot, street and sidewalk at the
acquired plant facility were completed at a total cost of
P192,000. These expenditures had an estimated useful life
of 12 years.
On July 1, machinery and equipment were purchased at
a total invoice cost of P340,000. Additional cost of P10,000
for delivery and P50,000 for installation were incurred.
On December 20, a machine with a cost of P170,000 and a
carrying amount of P29,750 at date of disposition was
scrapped without cash recovery,
Required:
Determine the depreciation of the building, machinery and
equipment, and land improvements for the current year.
800
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