Reference no: EM133003491
Problem - Selected accounts included in the property, plant and equipment of Fres Co. had the following balances:
Land P 132,500
Land Improvements 20,000
Building 600,000
Machinery 195,000
The following transactions were completed during the year:
1. Expenditures amounting to P150,000 were paid to the government for special assessment made to the lot.
2. A lot with a plant facility on it was acquired in exchange for 12,500 shares of Fres' stocks whose par value is P100. On the date of acquisition, the stock had a quoted price per share of P150. The book value of the plant facility is carried at P375,000; P125,000 of which pertains to the plant facility and the remainder to land. At the time of acquisition, the land had a market value of P500,000 and the building had a market value of P900,000.
3. Exchanged old equipment with a cost of P20,000 and accumulated depreciation of P9,000 for a new equipment on January 1, 2000 and paid cash of P3,000. The market value of the old equipment was P16,000.
4. Purchased land at a cost of P107,500 that included unpaid taxes of P10,000, which was assumed by Fres, and a mortgage of P27,500.
5. Additional machinery was purchased costing P350,000. The following costs were incurred in connection with the purchase:
Installation costs P 25,000
Cost of testing the machine 10,000
6. P125,000 was incurred for construction of parking lots, pavements and sidewalks. These are estimated to last for 10 years.
Required - Prepare the journal entries to record each case above.
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