How much is the correct cost of the operating equipment

Assignment Help Accounting Basics
Reference no: EM133121148

Question - Until We Me Again Corp. commenced operations early in 2019. During the first nine months, Until We Me Again acquired real estate for the acquisition of a building and other facilities. Operating equipment was purchased and installed, and the company began operating activities on April 2019. The company's accountant, who was not sure how to record some of the transactions, opened a Property, Plant and Equipment (PPE) ledger account and recorded debits and (credits) to this account as follows:

Cost of real estate purchased as building site - P 1,700,000

Paid architect's fee for design of new building - 230,000

Paid for demolition of old building on the building site purchased - 280,000

Paid property tax on the real estate purchased as the building site. - 17,000

Paid excavation costs for the new building - 150,000

Made the first payment to the contractor - 2,500,000

Paid for equipment to be installed in the new building - 1,480,000

Received from sale of salvaged materials from demolishing the old building - (68,000)

Made final payment to the building contractor - 3,500,000

Capitalizable interest on the construction fund - 220,000

Paid freight on equipment purchased - 19,000

Paid installation costs of equipment - 42,000

Paid for repair equipment damaged during installation - 27,000

PPE Ledger Balance = P10,097,000

Required -

1. How much is the correct cost of the land?

A. P1,717,000

B. P1,929,000

C. P2,149,000

D. P2,011,000

2. How much is the correct cost of the land improvement?

A. P150,000

B. P82,000

C. P68,000

D. P-0-

3. How much is the correct cost of the building?

A. P6,812,000

B. P6,592,000

C. P6,380,000

D. P6,000,000

4. How much is the correct cost of the operating equipment?

A. P1,480,000

B. P1,507,000

C. P1,541,000

D. P1,568,000

Reference no: EM133121148

Questions Cloud

What are the pros and cons of activity : Bristol-Myers Squibb, a company with single-A investment credit ratings, recently sold $2 billion of bonds that paid 3.35 percent interest.
Affect the success of acquisition : Of the problems that affect the success of an acquisition, which one do you believe is the most critical in the global economy? Why?
Derive the growing perpetuity formula : Derive the growing perpetuity formula. (Hint: this is very similar to what we did in class. Write 1+r out the PV of the (infinite) sum of discounted cash flows
What is mary effective annual rate : Mary purchased 100 shares of Sweet Pea Co. stock at a price of $48.36 six months ago. She sold all stocks today for $46.98. During that period the stock paid di
How much is the correct cost of the operating equipment : Received from sale of salvaged materials from demolishing the old building - (68,000). How much is the correct cost of the operating equipment
What is the beta of stock x : You also know that the correlation between the returns of stock X and the market portfolio is equal to 0.38.
Telehealth types of care : Given the recent events with COVID do you think we will see a change to more Telehealth types of care? How important will analytics be?
Withdrawals including the last one in year 8 : To complete your degree and then go through graduate school, you will need $95,000 at the end of each of the next 8 years. Your parents will deposit a sum of mo
What is the source of asymmetric information : Describe an adverse selection problem a company is facing. What is the source of the asymmetric information? Who is the less informed party?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd