Reference no: EM133090440

Assignment - Case - Property, plant and equipment

Exercise 1 - A company bought a packaging machine on September 15 paying for it ¢300,000,000. It is estimated that the machine can pack 5,400,000 products during its useful life and at the end of it can be worth ¢15,000,000. There are records of the operation of the machine during the first months (packaged products):

September 15,000 units

October 35,000 units

November 28,500 units

December 32,700 units

Required -

1. Calculate the depreciation expense for each of the previous months.

2. Determines the amount of depreciation accumulated as of December 31.

Exercise 2 - One building was acquired on July 30, 2015 for ¢350,000,000, of which ¢120,000,000 correspond to the value of the land. It is estimated to have a lifespan of 30 years and a rescue value of ¢20,000,000. On August 1, 2019 it is sold at ¢320,000,000.

Required -

1. Carrying value of assets as of August 1, 2019.

2. Gain or loss on the sale of assets.

Exercise 3 - On April 30, Ferretería El Tornillo, S.A. bought a store for its store for $125,000,000. The land was valued at $45,000,000. The useful life of the premises is 25 years and its residual value is $ 10,000,000.

Required -

1. It records the purchase of the premises on April 30, 2019.

2. Prepare the necessary adjustment entry to record depreciation expense as of December 31, 2019 and 2020, using the straight-line method.

3. Calculate the book value of the premises as of December 31, 2024.

4. If the useful life of the premises were 30 years, what changes would there be in subparagraphs b) and c)?