Reference no: EM132613774

At December 31, 2021, M COMPANY's noncurrent operating asset and accumulated depreciation accounts had balances as follows:

                                                          Cost of Asset                      Accumulated Depreciation

Land                                                P 130,000

Buildings                                             1,200,000                            P 265,400

Machinery and equipment                         775,000                             196,200

Automobiles and trucks                              132,000                          86,200

Leasehold improvements                                 221,000                     110,500

                                                              Depreciation Method            Useful Life

Land improvements                                          Straight line                   12 years

Buildings                                                   150% declining balance        25 years

Machinery and equipment                                  Straight line                   10 years

Automobiles and trucks                                      150% declining balance     5 years

Leasehold improvements                                        Straight line                   8 years

Depreciation is computed to the nearest month. The salvage values of the depreciable assets are immaterial.

Transactions during 2022 and other information are as follows:

a. On January 6, 2022, a plant facility consisting of land a building was acquired from A Corp. for P600,000. Of this amount, 20% was allocated to land.

b. On April 6, 2022, new parking lots, streets, and sidewalks at the acquired plant facility were completed at a total cost of P192,000. These expenditures had an estimated useful life of 12 years

c. The leasehold improvements were completed on December 31, 2008, and had an estimated useful life of 8 years. The related lease, which would have terminated on December 31, 2014, was renewable for an additional 4-year term. On April 29, 2022, M exercised the renewal option.

d. On July 1, 2022, machinery and equipment were purchased at a total invoice cost of P250,000. Additional costs of P10,000 for delivery and P30,000 for installation were incurred.

e. On August 30, 2022, M purchased a new automobile for P15,000.

f. On September 30, 2022, a truck with a cost of P24,000 and a carrying amount of P8,100 on the date of sale was sold for P11,500. Depreciation for the 9 months ended September 30, 2022, was P2,352.

g. On December 20, 2022, a machine with a cost of P17,000 and a carrying amount of P2,975 at the date of disposition was scrapped without cash recovery.

Requirements:

Question a. Prepare the journal entries for 2022.

Question b. What is the depreciation expense on land improvements for 2022?

Question c. What is the depreciation expense on building for 2022?

Question d. What is the depreciation on automobiles and trucks for 2022?

Question e. What is the depreciation expense on leasehold improvements for 2022?

Question f. What is the depreciation expense on machinery and equipment for 2022?

Question g. What is the total depreciation expense for 2022?

Question h. What is the book value of the PPE items on December 31, 2022?