ASINAG recently acquired a building and the surrounding land. The company's accountant established a single Land and
Question:
ASINAG recently acquired a building and the surrounding land. The company's accountant established a single Land and Building account and has made the following entries: 2016
Land and Building account January 3 Acquisition price 1,275,000
January 3 Prepayment of insurance on building (2years) 16,500
March 7 Renovation cost on building 127,500
April 1 Entertainment cost to familiarize the public 6,000
December 31 Depreciation for 2016, computed by SLM 20-year life (71,250)
Balance P 1,353,750
Additional findings:
· Upon acquisition, the land was independently appraised at P345,000 and the building P1,035,000
· Company computes depreciation using straight line method
· The building is expected to have a residual value 10%% of its cost basis at the end of its 20-year Ifie.
· The building was placed in service on April 1, 2016.
acquired a used delivery truck for P163,050 on July 1, 2016. The following expenditures were made upon acquisition and debited likewise to Equipment account.
· New tires P 12,150
· Body repair and paint 13,350
· Installation of special shelves 7,650
· One-year insurance premium 6,000
Management expects the truck to be of service for four years and to be driven a total of 80,000 kilometers. Expected salvage value is P30,000. Depreciation has not been provided on this truck and will be computed using service quantity-kilometers. The truck was driven 8,000 kilometers from August to December 2016.
Questions:
1. Adjusted balance of Land
2. Adjusted Balance of Building
3. Adjusted balance of Delivery Equipment
4. Total amount of Accumulated Depreciation
5. Total Carrying amount of PPE at year end 2016
Expert Answer:
1Adjusted balance of Land The Land account was initially recorded at the acquisition price of P1275000 However it was independently appraised at P345000 upon acquisition To adjust the balance we need ... View the full answer
