Reference no: EM132948184

Questions -

Q1. Hally Inc. bought 5,000 shares of Pop Company par $100 at $120 in March 2020 Hally Inc. received a share dividend of 1 share for every 5 owned on August 30, 2020. On September 15, 2020, the entity received a cash dividend of $10 per share. On October 1, 2020, Hally Inc. was granted the right to purchase 1 share at $105 for every 4 rights held. The share had a market value of $115 and the right had a value of $5 on the date the rights were received. On December 15, 2020, the company sold 2,000 rights at $7.50 and exercised the remaining rights. How much is the average unit cost of the total investment as of December 31, 2020?

Q2. Deep Corporation's standing sugar cane fair value as of January 1, 2020 was $2,700,000 and as of December 31, 2020 was $2,800,000. The biological asset has a life span of less than a year and has no dual purpose. The selling price of the agricultural produce harvested during the period was $2,100,000, on the respective dates of harvest. The estimated cost to sell is $100,000. How much is the net amount of gain that Depp Corporation should report in its December 31, 2020 profit or loss related to the biological asset and agricultural produce?

Q3. On August 31, 2019, Tinay Corporation bought a new machinery for $540,000. The machinery has an estimated useful life of 5 years and depreciation is computed using the sum of the years method. Estimated salvage value of the machine is $60,000.

a. How much is the total accumulated depreciation on December 31, 2020?

b. If Tinay Corporation decides to change its depreciation method to straight-line at the start of 2021, how much is the depreciation expense for the year ended December 31, 2021?

Q4. Sun Corporation obtained a building on January 1, 2017 at a cost of $20,000,000. The building had a useful life of 6 years and residual value of $2,000,000. The building was revalued on January 1, 2020 and the revaluation revealed replacement cost of $30,000,000, residual value of $4,000,000 and revised useful life of 8 years from the date of acquisition. How much is the revaluation surplus on January 1, 2020?

Q5. On January 1, 2020, Stanley Corporation showed land with a carrying amount of $10,000,000 and building with cost of $60,000,000 and accumulated depreciation of $18,000,000. The land and building were revalued on the same date and revealed the fair value of land at $15,000,000 and building at $70,000,000. The original useful life of the building is 20 years and depreciation is computed using the straight line.

a. How much is the revaluation surplus on December 31, 2020?

b. How much is the annual depreciation for 2020?