Reference no: EM132982320
Blue Corporation revealed the following balances on January 1, 2021:
Land P4,000,000
Land improvements 1,300,000
Buildings 20,000,000
Machinery and equipment 8,000,000
The following transactions transpired during the current year:
- A plot of land was purchased for P2,000,000 in cash as a building site.
- In exchange for 200,000 shares of the company, a plant facility comprising of land and a building was purchased. On the day of the purchase, each share was quoted on a stock exchange for a price of P45. At the date of exchange, the plant facility was carried on the seller's records at P1,600,000 for the land and P5,400,000 for the building. The land and building are currently appraised at values P2,000,000 and P8,000,000, respectively. The building has a life expectancy of forty years and a residual value of P200,000.
- The items of machinery and equipment were bought at P4,000,000 total cost. Additional costs were P100,000 for freight and unloading and P300,000 for installation. The equipment has a ten-year useful life and no residual value.
- P1,200,000 was spent on the new parking lot, street, and sidewalks at the company's different plant sites. These expenses were expected to have a useful life of fifteen years.
- For the year, Research and Development costs amounted to P1,100,000.
- On January 1, 2014, a machine costing P200,000 was scrapped on June 30, 2021. On the basis of a 10-year life with no residual value, straight-line depreciation had been recorded.
- On July 1, 2021, a machine was sold for P500,000. On January 1, 2018, the sold machine's original cost was P700,000, and it was depreciated straight-line over an anticipated useful life of 8 years with a residual value of P50,000.
Problem 1: On Dec. 31, 2021, how much is the land's total cost?
a) P7,800,000
b) P7,600,000
c) P8,000,000
d) P6,800,000
Problem 2: On Dec. 31, 2021, how much is the total cost of land improvements?
a) P1,200,000
b) P3,600,000
c) P1,300,000
d) P2,500,000
Problem 3: On Dec. 31, 2021, how much is the total cost of buildings?
a) P28,000,000
b) P25,400,000
c) P27,200,000
d) P27,000,000
Problem 4: On Dec. 31, 2021, how much is the total cost of machinery and equipment?
a) P12,400,000
b) P11,500,000
c) P11,000,000
d) P11,700,000
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