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At 1 January 2020

At 1 January 2020, the revaluation surplus of Bloxden was P1,257,000 for its head office. During 2020, the value of the head office increased by P82,000 while the factory suffered an impairment of P90,000. To calculate the revaluation surplus at 31 December 2020, we add the increase in head office value and subtract the impairment of the factory.

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Carl Yry Bitz
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725 views

At 1 January 2020

At 1 January 2020, the revaluation surplus of Bloxden was P1,257,000 for its head office. During 2020, the value of the head office increased by P82,000 while the factory suffered an impairment of P90,000. To calculate the revaluation surplus at 31 December 2020, we add the increase in head office value and subtract the impairment of the factory.

Uploaded by

Carl Yry Bitz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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At 1 January 2020, the revaluation surplus of Bloxden was P1,257,000.

This was in
respect of the company’s head office. During the year to 31 December 2020, the value
of the head office increased by a further P82,000. In the same period, the company’s
factory suffered an impairment of P90,000. What is the value of the revaluation surplus
at 31 December 2020?
Group of answer choices

P1,249,000

P1,167,000

P1,339,000

P1,257,000

Tycoon Corporation acquired a building on January 1, 2016 at a cost of


P50,000,000.  The building has an estimated life of 10 years and residual value
of P5,000,000.  The building was revalued on January 1, 2020 and the
revaluation revealed replacement cost of P80,000,000, residual value of
P2,000,000 and revised total life of 12 years.
 
The revaluation surplus as of December 31, 2020 is
Group of answer choices

P14.7 million

P15.4 million

P16.8 million

P14.0 million
 PreviousNext 

Bugis Corp. acquired a machine on January 1, 2012. Details of the machine at December
31, 2019 are given below:
 

Component Cost Depreciation basis


Useful life of
Engine P170,000,000
40,000 hours

Outer casings 510,000,000 25 years straight line

 
Other components 12 years straight line
  255,000,000

  P765,000,000  

 
During the year 2020, the following events took place:
1. Engine, which had run for 30,000 hours till date developed serious snags. It
was replaced by a better engine with a cost of P238 million and estimated life
of 50,000 hours.  The new engine was used for 5,000 hours during the year.
2. Polishing and painting was done to the outer casings at a cost of P1.3 million.
3. Other components were upgraded at a cost of P102 million. The remaining life
of the other components is 5 years.
 
Compute the total depreciation for the year 2020, assume that all the work mentioned
above was completed at the beginning of 2020.
P90,950,000

P81,676,470

P85,850,000

P81,600,000

Cavite Company acquired land and building by issuing 60,000, P100 par value, ordinary
shares. On the date of acquisition, the shares had a fair value of P150 per share and the
land and building had fair value of P2,000,000 and P6,000,000 respectively.
 
During the year, Cavite also received land from a shareholder to facilitate the
construction of a plant in the city.  Cavite paid P100,000 for the land transfer.  The
land’s fair value is P1,500,000.
 
As a result of these acquisitions, Cavite Company’s equity had a net increase of
P9,500,000

P7,400,000

P10,500,000

P9,400,000

Newcastle Ltd uses many kinds of machines in its operations. It constructs some of these
machines itself and acquires others from the manufacturers.  The following information
relates to machine A that it has recorded during the current year.
 

Cash paid for equipment, including VAT of P9,600 P89,600

Costs of transporting machine - insurance and


3,000
transport

Labor costs of installation by expert fitter 5,000

Labor costs of testing equipment 4,000

Insurance costs for current year 1,500

Costs of training for personnel who will use the


2,500
machine

Costs of safety rails and platforms surrounding


6,000
machine

Costs of water devices to keep machine cool 8,000


Costs of adjustments to machine to make it
7,500
operate more efficiently

 
Determine the amount at which machine A should be recorded in the records of
Newcastle Ltd.

P121,500

P113,500

P105,500

P116,000

Shellfish Company determined that, due to the obsolescence, equipment with an original
cost of P180,000 and accumulated depreciation at January 1, 2020 of P84,000 had
suffered permanent impairment, and as a result should have fair value of only P60,000 as
of the beginning of the year. Additionally, the remaining useful life of the equipment was
reduced from eight years to three years.
 
If the company’s policy is to credit accumulated depreciation when a PPE is impaired,
how much should selfless report as accumulated depreciation in its December 31, 2020
statement of financial position?
140000

On January 2, 2020, VSG purchased a transportation equipment costing P2,400,000.


The new asset has an estimated useful life of 8 years with no salvage value. VSG
depreciates this type of asset using the straight-line method. On January 1, 2022, VSG
determined that the machine had a remaining useful life of 6 years from the date of
acquisition with no salvage value.
 
How much is the revised depreciation for 2022?
On February 5, 2020, Diamond Company purchased a new machine on a deferred
payment basis. A down payment of P100,000 and P250,000 four equal annual
installments will be made every February 1, starting next February 1, 2021. The cash
equivalent price of the machine is P950,000. The imputed discount rate is 6.83%.
Diamond also incurred P30,000 in installation costs.
 
How much should be capitalized as cost of the machine?
Group of answer choices

950,000

980,000

900,000

1,100,000

PINAUTANG started constructing a building for its own use in March 1, 2020.
PINAUTANG provided the following information related to the construction:
 
Outstanding loans of the Company at January 1, 2020:       

Interest Rate Amount of loan Interest Cost

5% P10,000,000 P   500,000

10% 20,000,000 2,000,000

 Total P30,000,000 P2,500,000

 
On January 1, 2020, PINAUTANG also borrowed P3,000,000 at 15% per annum, to
specifically fund its expected construction on March 1, 2020.
 

March 1, 2020 P1,000,000 February 1, 2021 P3,000,000


May 31, 2020 8,000,000 March 31, 2021 2,000,000

July 1, 2020 7,000,000    

November 31,2020 4,000,000    

December 31, 2020 1,000,000    

 
How much is the total cost of the constructed asset as of December 31, 2020?
Group of answer choices

23,950,000

22,152,467

22,133,060

21,944,217

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