Reference no: EM132680524

Question - Information pertaining to Aliya Corporation's property, plant and equipment for 2028 is presented below:

Account balances at January 1, 2028:

Debit Credit

Land P 150,000

Building 1,200,000

Accumulated depreciation 263,100

Machinery and equipment 900,000

Accumulated depreciation 250,000

Automotive equipment 115,000

Accumulated depreciation 84,600

Depreciation methods used useful life

Building - 150% declining balance; 25 years

Machinery and equipment - straight-line; 10 years

Automotive equipment - sum of year's-digits; 4 years

The salvage value of the assets is immaterial. Depreciation is computed to the nearest month.

Transactions during 2028 and other information:

On January 1, Aliya purchased a new car for P 10,000 cash and trade-in of a two-year old car with a cost of P 9,000 and a book value of P 2,700. The new car has a cash price of P 12,000; market value of trade in is not known.

On April 1, a machine purchased for P 23,000 on April 1, 2023, was destroyed by fire. Aliya recovered P 15,500 from its insurance company.

On July 1, machinery and equipment were purchased at a total invoice cost of P 280,000; additional costs of P 5,000 for freight and P 25,000 for its installation were incurred.

Aliya determined that the automotive equipment comprising the P 115,000 balance at January 1, would have been depreciated at a total amount of P 18,000 for the year ended December 31, 2028.

Required -

A. What is the correct depreciation expense for 2028 for the following PPE items:

1. Building

2. Machinery and equipment

3. Automotive equipment

B. What is the correct accumulated depreciation as of December 31, 2028 for the following PPE items:

4. Building

5. Machinery and equipment

6. Automotive equipment