The property, plant and equipment section of San Miguel Corporation’s balance sheet at December 31, 2014 included the following items: Land P 2,500,000 Land improvements 560,000 Building 3,600,000 Machinery and equipment 6,600,000 During 2015 the following data were available to you upon your analysis of the accounts: Cash paid on purchase of land P10,000,000 Mortgage assumed on the land bought, including interest at 16% 16,000,000 Realtor’s commission 1,200,000 Legal fees, realty taxes and documentation expenses 200,000 Amount paid to relocate persons squatting on the property 400,000 Cost of tearing down an old building on the land 300,000 Amount recovered from the salvage of the building demolished 600,000 Cost of fencing the property 440,000 Amount paid to a contractor for the building erected 8,000,000 Building permit fees 50,000 Excavation expenses 250,000 Architect’s fee 100,000 Interest that would have been earned had the money used during the period of construction been invested in the money market 600,000 Invoice cost of machinery acquired 8,000,000 Freight, unloading, and delivery charges 240,000 Customs duties and other charges 560,000 Allowances, hotel accommodations, etc., paid to foreign technicians during instillation and test run of machines 1,600,000 Royalty payment on machines purchased (based on units produced and sold) 480,000 REQUIRED: Based on the above, compute for the following as of December 31, 2015: 1. Machinery and equipment 2. Total depreciable property, plant and equipment
The property, plant and equipment section of San Miguel Corporation’s balance sheet at December 31, 2014 included the following items: Land P 2,500,000 Land improvements 560,000 Building 3,600,000 Machinery and equipment 6,600,000 During 2015 the following data were available to you upon your analysis of the accounts: Cash paid on purchase of land P10,000,000 Mortgage assumed on the land bought, including interest at 16% 16,000,000 Realtor’s commission 1,200,000 Legal fees, realty taxes and documentation expenses 200,000 Amount paid to relocate persons squatting on the property 400,000 Cost of tearing down an old building on the land 300,000 Amount recovered from the salvage of the building demolished 600,000 Cost of fencing the property 440,000 Amount paid to a contractor for the building erected 8,000,000 Building permit fees 50,000 Excavation expenses 250,000 Architect’s fee 100,000 Interest that would have been earned had the money used during the period of construction been invested in the money market 600,000 Invoice cost of machinery acquired 8,000,000 Freight, unloading, and delivery charges 240,000 Customs duties and other charges 560,000 Allowances, hotel accommodations, etc., paid to foreign technicians during instillation and test run of machines 1,600,000 Royalty payment on machines purchased (based on units produced and sold) 480,000 REQUIRED: Based on the above, compute for the following as of December 31, 2015: 1. Machinery and equipment 2. Total depreciable property, plant and equipment
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The property, plant and equipment section of San Miguel Corporation’s balance sheet at
December 31, 2014 included the following items:
Land P 2,500,000
Land improvements 560,000
Building 3,600,000
Machinery and equipment 6,600,000
During 2015 the following data were available to you upon your analysis of the accounts:
Cash paid on purchase of land P10,000,000
Mortgage assumed on the land bought, including interest at 16% 16,000,000
Realtor’s commission 1,200,000
Legal fees, realty taxes and documentation expenses 200,000
Amount paid to relocate persons squatting on the property 400,000
Cost of tearing down an old building on the land 300,000
Amount recovered from the salvage of the building demolished 600,000
Cost of fencing the property 440,000
Amount paid to a contractor for the building erected 8,000,000
Building permit fees 50,000
Excavation expenses 250,000
Architect’s fee 100,000
Interest that would have been earned had the money used during
the period of construction been invested in the money market 600,000
Invoice cost of machinery acquired 8,000,000
Freight, unloading, and delivery charges 240,000
Customs duties and other charges 560,000
Allowances, hotel accommodations, etc., paid to foreign
technicians during instillation and test run of machines 1,600,000
Royalty payment on machines purchased (based on units
produced and sold) 480,000
REQUIRED:
Based on the above, compute for the following as of December 31, 2015:
1. Machinery and equipment
2. Total depreciable property, plant and equipment
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