For the next four items, refer to the following problem:

On January 1, 2016, a company reported the following property, plant and equipment:

Land 875,000

Land improvements 225,000

Building 1,500,000

Machinery 375,000



Transactions during the current year

• A tract of land was acquired for P312,500 and intended definitely for use as

future building site.

• A plant facility consisting of land and building was acquired in exchange for

P25,000 of the company's shares.

On the acquisition date, the share had a closing market price of P45 on a stock

exchange.

The plant facility was carried at P250,000 for land and P750,000 for the building

at the exchange date.

Current appraised values for the land and building, respectively, are P300,000

and P600,000.

• Expenditures totaling P187,500 were made in January for new parking lot, street

and sidewalk at the entity's various plant locations. These expenditures had an

estimated useful life of fifteen years.

• Machine was purchased at a cost of P750,000. Freight and unloading charge of

P12,500, and installation cost of P87,500 were incurred.

• A machine was sold for P43,750 on July 1, 2016. Original cost of machine was

P125,000 on January 1, 2014 and it was depreciated on the straight line basis

over an estimated useful life of five years and no residual value.



14. What is total cost of land at year-end?

15. What is the total cost of building at year-end?

16. What is the total cost of land improvements at year-end?

17. What is the total cost of machinery at year-end?

Answer rating: 100% (QA)

The total cost of land at yearend is Original cost of land P875000 Cost of additional land acquired ... View the full answer