n the erly ntity's before m and sed to If not, Chapter 5 - Property, Plant...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
n the erly ntity's before m and sed to If not, Chapter 5 - Property, Plant and Equipment - Cost Model 5-43 E 5-3- Acquisitions of PPE The following pertains to an entity's acquisitions of PPE during the year: (a) Purchased a new printing machine on Dec. 2 at an invoice price of P4,000,000 with terms 2/10, n/30. On Dec. 15, the entity paid the required amount for the machine. (b) Acquired an equipment by issuing P800,000, five-year 6% note. The entity's incremental borrowing rate is 14%. The annual payment of principal and interest on the note is to be P189,930. The asset has a cash price of P651,460. (c) Acquired a machine on Dec. 30 by issuing noninterest bearing note requiring three payments of P1,000,000. The first payment was made on the date of purchase, and the others are due annually on Dec. 30. The prevailing rate of interest for this type of note at date of issuance was 12%. The present value of an ordinary annuity of 1 at 12% is 1.69 for two periods and 2.40 for three periods. (d) The entity has a machine with a carrying amount of P450,000. Another entity has a delivery vehicle with a carrying amount of P300,000. The entities exchanged the machine and vehicle, and the other entity paid an additional P90,000 cash as part of the exchange. Assume that the fair value of the delivery vehicle is P420,000. The exchange has commercial substance. (e) A used delivery truck was traded in for a new truck. Information relating to the trucks follows: Used truck: Cost P1,600,000 1,200,000 Accumulated depreciation New truck: List price 2,000,000 1,900,000 Cash price without trade-in 1,560,000 Cash price with trade-in (f) Received land from a non-owner to facilitate the construction of a plant. The entity paid P100,000 for the land transfer. The land's fair value is P1,500,000. Required: Prepare the journal entry to record each acquisition. n the erly ntity's before m and sed to If not, Chapter 5 - Property, Plant and Equipment - Cost Model 5-43 E 5-3- Acquisitions of PPE The following pertains to an entity's acquisitions of PPE during the year: (a) Purchased a new printing machine on Dec. 2 at an invoice price of P4,000,000 with terms 2/10, n/30. On Dec. 15, the entity paid the required amount for the machine. (b) Acquired an equipment by issuing P800,000, five-year 6% note. The entity's incremental borrowing rate is 14%. The annual payment of principal and interest on the note is to be P189,930. The asset has a cash price of P651,460. (c) Acquired a machine on Dec. 30 by issuing noninterest bearing note requiring three payments of P1,000,000. The first payment was made on the date of purchase, and the others are due annually on Dec. 30. The prevailing rate of interest for this type of note at date of issuance was 12%. The present value of an ordinary annuity of 1 at 12% is 1.69 for two periods and 2.40 for three periods. (d) The entity has a machine with a carrying amount of P450,000. Another entity has a delivery vehicle with a carrying amount of P300,000. The entities exchanged the machine and vehicle, and the other entity paid an additional P90,000 cash as part of the exchange. Assume that the fair value of the delivery vehicle is P420,000. The exchange has commercial substance. (e) A used delivery truck was traded in for a new truck. Information relating to the trucks follows: Used truck: Cost P1,600,000 1,200,000 Accumulated depreciation New truck: List price 2,000,000 1,900,000 Cash price without trade-in 1,560,000 Cash price with trade-in (f) Received land from a non-owner to facilitate the construction of a plant. The entity paid P100,000 for the land transfer. The land's fair value is P1,500,000. Required: Prepare the journal entry to record each acquisition.
Expert Answer:
Answer rating: 100% (QA)
Step 1 iAs per our protocol we provide solution to the one question only but as yo... View the full answer
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher
Posted Date:
Students also viewed these accounting questions
-
The following questions are used in the Kaplan CPA Review Course to study leases while preparing for the CPA examination. Determine the response that best completes the statements or questions. 1. A...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
On 1 Jan 2018, A Ltd acquired all the outstanding shares of B Ltd when the equity of B Ltd consisted of share capital (10,000 shares) of $10,000 and retained earnings of $5,000. Details of the...
-
Dr. Bold has a personal automobile policy with liability limits as follows: $100,000/$300,000 BI and $50,000 PD. Dr. Bold is held liable in an accident in which he must pay for bodily injuries as...
-
Marcum Company was started in 2012 when it issued a note to borrow $6,200 cash. Required Write an accounting equation, and record the effects of the borrowing transaction under the appropriate...
-
Define and explain why the following are important: long-term value creation, investors required IRR, investors required share of ownership, DCF, deal structure, and sand traps in fund-raising.
-
Downey Corporation sold $400,000 of 9 percent, ten-year bonds for face value on September 1, 20xx. The issue date of the bonds was May 1, 20xx. The companys fiscal year ends on December 31, and this...
-
Javier Gonzales is the manager of the Repairs and Maintenance Department of JG Industries. He is responsible for preparing his departments annual budget. Most managers in the company inflate their...
-
Will give a thumbs up for correct answers. Thanks!Only solve question 9 9. The vectors a and b are perpendicular. Are the vectors 47 and -2b also perpendicular? Illustrate your answer with a sketch....
-
If pp annihilation at rest proceeds via S-states, explain why the reaction pp 0 0 is forbidden as a strong or electromagnetic interaction.
-
If you had to choose deontology and use it for all your personal ethical decision making? Why this one? How would you respond to the arguments raised against the deontology theory ?
-
Once an organization becomes a digital business, does it have any need for digital transformation?
-
What is the success rate for transformation efforts in general? What is the success rate for digital transformation efforts? Why is the success rate for digital transformation efforts much worse?
-
What are some challenges and risks of digital business transformation?
-
People often talk about the digital business imperative and the digital transformation imperative. Are these the same or different?
-
What is the digital business imperative?
-
the term "market calitalization" reders to
-
When a company has a contract involving multiple performance obligations, how must the company recognize revenue?
-
What is the difference between simple and multiple regression?
-
What do the terms variable costs and fixed costs mean?
-
What are the advantages and disadvantages of a negotiated transfer price system?
-
Fosters Group Limited and Heineken N.V. are two well-known beer companies. Fosters is an Australian company, and Heineken is Dutch. Fosters is about half the size of Heineken. Ratios can help in...
-
Tenet Healthcare Corp., the second largest publicly traded hospital chain in the United States, had a large amount of uncollectible accounts expense because so many patients were unable to pay their...
-
Access the annual reports of J.C. Penney and Dillards. Find the accounts receivable on each companys balance sheet and the notes to the financial statements that are related to those accounts. Which...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App