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Required: Compute for the adjusted balance of the property and equipment Thank you! Please answer complete

Required: Compute for the adjusted balance of the property and equipment Thank you! Please answer complete

FINANCIAL ACCOUNTING
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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Required: Compute for the adjusted balance of the property and equipment Thank you! Please answer complete
b. Included in this account is a lot purchased from Victor Gonzales, located in Magsingal, llocos Sur, for P11,428. This was bought in July 1, 2019 on installment basis; P3,428 cash down payment and the balance, in equal quarterly payments of principal and accruing quarterly interest at 24% per annum starting October 1, 2019. LCV used this lot as part payment of an altar piece of the Magsingal church for a total consideration of P13,428; of which P2,000 was paid in cash and recorded as Antiques for Sale. Under a three-party agreement among the Parish Council and church officials, Victor Gonzales, and LCV, the land title is transferable to the Parish Church upon completion of LCV's obligation. However, the church is allowed by the agreement to convert this land immediately to a memorial park. Victor and his heirs guaranteed the ultimate transfer of title. Additionally, Victor's family made a cash donation of P2,000 as start up capital for the development of the memorial park. c. Based on the quarterly payment schedule of principal and accruing interest, LCV recorded a liability in the amount of P10,16o to Due to Stockholder; the same account was debited for P1,480 (including interest) for LCV's first payment on October 1,2019. Balance Sheet - 12/31/2019 Per Books Adjustments Per Audit Cash P16,026 Accounts receivable 6,747 Dividend receivable 1,000 Antiques for sale Investments 1,273,670 552,725 Property and equipment 38,763 P1,888,931 Note: Income tax payable is net of quarterly tax payments Notes: 1. Excess of fair market or appraised value of assets over cost is in the following: Antiques for sales P709,197 6,400 Investments Property and Equipment – Land 2,500 P718,097 2. Adjustments to income relating to Investments are nontaxable or non-tax deductible items. Ignore these items in income tax provision computation.
Transcribed Image Text:b. Included in this account is a lot purchased from Victor Gonzales, located in Magsingal, llocos Sur, for P11,428. This was bought in July 1, 2019 on installment basis; P3,428 cash down payment and the balance, in equal quarterly payments of principal and accruing quarterly interest at 24% per annum starting October 1, 2019. LCV used this lot as part payment of an altar piece of the Magsingal church for a total consideration of P13,428; of which P2,000 was paid in cash and recorded as Antiques for Sale. Under a three-party agreement among the Parish Council and church officials, Victor Gonzales, and LCV, the land title is transferable to the Parish Church upon completion of LCV's obligation. However, the church is allowed by the agreement to convert this land immediately to a memorial park. Victor and his heirs guaranteed the ultimate transfer of title. Additionally, Victor's family made a cash donation of P2,000 as start up capital for the development of the memorial park. c. Based on the quarterly payment schedule of principal and accruing interest, LCV recorded a liability in the amount of P10,16o to Due to Stockholder; the same account was debited for P1,480 (including interest) for LCV's first payment on October 1,2019. Balance Sheet - 12/31/2019 Per Books Adjustments Per Audit Cash P16,026 Accounts receivable 6,747 Dividend receivable 1,000 Antiques for sale Investments 1,273,670 552,725 Property and equipment 38,763 P1,888,931 Note: Income tax payable is net of quarterly tax payments Notes: 1. Excess of fair market or appraised value of assets over cost is in the following: Antiques for sales P709,197 6,400 Investments Property and Equipment – Land 2,500 P718,097 2. Adjustments to income relating to Investments are nontaxable or non-tax deductible items. Ignore these items in income tax provision computation.
7. Property and Equipment a. LCV office and display center is located in New Manila. It is an old house, reconstructed without any change in architectural design for P10,000. Property area is about 2,000 sq. m. This office, including land, office machines, furniture and fixtures, transportation equipment, has carrying value of P38,763 net of P3,800 depreciation. Land, as appraised by independent appraiser, is valued here at P2,500 over cost at December 31, 2019.
Transcribed Image Text:7. Property and Equipment a. LCV office and display center is located in New Manila. It is an old house, reconstructed without any change in architectural design for P10,000. Property area is about 2,000 sq. m. This office, including land, office machines, furniture and fixtures, transportation equipment, has carrying value of P38,763 net of P3,800 depreciation. Land, as appraised by independent appraiser, is valued here at P2,500 over cost at December 31, 2019.
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