ILIPPINES counic UNIVERSITY OF THE Pain College of Accountancy and Finance acco aabisinemedinte acount nach Proper, Pen ard Espen ingen On ‘Semester A.Y, 2019-2020 “Jour mind tht you ean answer everyting tothe best tem. Shr your solutes pita of the best answer before tne mamber foreach i a pal cae te Slowed far the fre! anser ALY ONer¥e tr spare workol No soln, no rad dsr, erasures are not HONESTY daring the exeminaon, GODBLESST 7 ‘THEORIES (1 pen, plan and equipment ae defined as: (Jere ae aces held er slo ine odin course of business Aree eects eam rena or forced apreaion O°ba PeimetMcshl or wo ln the pod of goods cr services, for rental 1 others, i poses, and expected tobe sed daring more than one reporting pio inte ates hel for an th odiary course of business (), 3-6 directly attributable to bring the asset to the location and condition nevessary for it to be capable of » cperaing inthe manner intended by management exclude A. instalation and assembly costs. B. cost of testing whether the asset is functioning propery. . professional fees. D. costof opening new facility ic statement is incorrect regarding iitial measurement of PPE? ‘A. PPE shouldbe initially recorded at cost, which includes cost necessary to bring the asset to working, ‘condition for itimtended use 'B. If payment is defered beyond normal eredit terms, the cost of an item of property, plant nnd ‘auipment iste cash price equivalent atthe recognition date. The difference between the eash price ‘equivalent and the to'al payment is recognized as interest over the period of eredit. Fat sssets acquired in exchange of another asset, the cost will be measured at carrying amount. D, If the asset acquired in exchange for another asset ism a Saying emo othe ce eames Nol neasured at Fi val, is cost is measured f If an entity is able to determine the fair value in mang hes of he ae reste Lemuemacce " Biarvatesteacaiccnee SERB othe ast gen up ) 6 Which of the following is not a capitalizable incidental, i anne ae oon ne Boe oe etre Cai €. Cos ofyloeatin or eons of prepay Beas ere 5. Sepettinne rasval, veneer Tred t ta th bling should be Med Torte eos Tia the cost incu ond pen 4. expensed . added othe costo the biting « ‘of bo the asset received and the asset xiven up, which is used ost relating to land? #5 0 2equr possesion,— 1, charged to retained earings 1. aed tothe cast ofthe land WHT oF he following shall not be capitalized ae pet ofthe cost. ‘A-conmissions related the and sagas Cy Be Property taxes atthe date of acquisition azsumed by the purchaser &, mation cots incur in przaratian fr the contruction of nw building on the land D, the cost of a survey. ey ‘ ae 'a newly acquired land? 23 fume sum purchase of ests, wich of the following best describes the process by which the intial os ‘of the various assets should be determined? * A location ofthe tbl cost to the individual ats onthe bass ofthe hist cost of the insu as othe engin nner 3. Allocation of the ttl eost 1 he indvdul ato the bass of th fir vale ofthe individ assets atthe tine of pce ©. Recorting ofthe dial sets ater fr ifeence betvecn the pice and th fava of D. Recording of thinset theatre 1 the seller wih grin or loss ecognized as thesieence between the prc pai andthe oral oat igus C. Stee th sorprato ise aay stares fan he nd should be esx atthe ‘A. total par value ofthe shares issued. C-fair value othe lad B. total book value ofthe shares isued. —_D- total liquidating value of the shares issued ‘The period of time during which interest must be eapitalized ends when ‘A the asset i substantially complete and ready for its intended vee B. no farther interest cost is being ineured. . the asset is abandoned, sold or filly depreciate. D,theaetivties that are necessary to get the aset fr its intended use é finds are borrowed specifically for the purpose of obaining a qualifying asset, ‘rowing costs equal to ‘A. actual borrowing cost incurred during the period. B. actual borrowing cost incurred during the period plus ay investment sneome ot the temporary investment ofthe borrowings, . actual borrowing cost incurred during the period minus any iavestment incame on the temporary investment ofthe beerowings. D,esfimated borrowing cost during the period the capitaizable © Spee quaitying ase is finanoe by the general borrowings, th ‘cect bemoing ect nad Boul een onthe set mulpied by acapicizaton rate avrg expends onthe aie mulled by a cpitliation rate or actual bomowing east incur wbichorertover. D. avenge capendnes onthe axet mulled by a caption rate ee acl borowing cost incu hich pt apitalizable interest cost is equal to sh ft loving sa ulin sf be paps of ceptable oroving cost? ‘A. lvetres tht ae runly manutd or thers produced in lage se na repetive tesisovera short pened of tne Fe Lae tiie natn 8 Accs that eel fr he intended se orale whe aceite. Prop undecanstvcion tat will tec gee cr-oecupad building that is undergoing minor mod Heaton, fr _J8-fow shou n steric uray acount fos non-monetary govemmment grant ofa PPE? "A. Record both the asset and the grant at fit value B, Record oth the asset andthe rant at an acnt estimate by the managemest . Record the asset nt nominal account and ne grant at fe vel 1D, Record the asst at fair value and the grant at a nominal smears ‘ACO 20083: Proper, Plant an etre ra ESPROBLEMS 4 Asume the following independent cases ee A tthe begining Of the yar, check was issued for P400,000 es payment for a3 L fy © iperastmed te aby rhe ep tne al he ed ofthe year, PO,000 and those assessed fr the current year at 9,000, het of P60 per sare (based upon B, A company seed 14,900 ordinary shares (P10 pat) with a market value of PO pe upon 4 yecet sale of 10 shares) fic the land. The land was recently appraised at 04,000 by independe and competent appraisers he A company reed ert paca hs ltd for FOOD OO cash two yeas ago, Tse the company sued 100,00 ordinary shares fer the land (aket value ofthe or@inary share, P78 cal tased on evel rest lrg ansactions and normal weekly tock trang volume). : . A company pursased land by signing a nate withthe sller, requiring P100,000 down payment, Baye f F200 one ya fr pcs, and PH,00 he es om pri, The Role is orinterest beeing, bu the ging rate of similar noes is 10% (Noe: PV should be at 2 decal places), ‘How much is the cost af tancl acquired in (a), (b), (c) and (d), respectively? A. 419,00, F800 000; 7.80000, 269.200 _B._Ps10,00; Pao 0; P7 800,00; 260,200 ‘C. pro.000; sooo; P's, 300000 ',_a9!po0, Paap ooo 00-00; P300,000, (372 Getter Dean Company sachanged an ld skin achne costing P240,000 an’ 50% deprecated, for simi ed moses pai a ah ile of "02/00, Te mark value Ute GO enn Inch as dace be PEO). How muck the cs ofthe newly set cach ea meu ofein ares eect ta Dean shal conse i caer 1. Fi ant Bont ss ©. P1720 an 20000 ain D. P108,000 and P20,000 gain marci for P500.000 plus the folowing costs: excavation fees -P120,00; Areitectnal aioe sen eam ec — 0,000; Payment forthe insurance prema dung ths Sousuucio ose 15,000, What are the costs of the Zand and new building, respectively? ‘A. P6,200,000 and P3,395,000 ‘C.P5,000,000 and Pa, 595,000 6,000,000 an P3:395,000 1D. P5,000,000 and P3'595,000 Data for 1910 21 ‘Rehan Co_sel-contucted an asset for is own use. Construction started on Dee. 3 Ce 2019. Costs incurred barat Wt a5 olows: an 1-P400,000; Ape. | ~PS00,000; Aug 1 ~ P480,00D; Dee. 1 - PIO DOD h Da iste weage scum endear he oofooreear AS Te pss orm a: Pt ony at, ; F Be ape tt wore. 18% loan of P50, 000, specifically obfained to "A. Po0.005, the seY-constructed asset? 00, D.P280,800 finance the asset © Pcie tain ic he rowing amoung FEO) Od es sefconaintn, whe eis 2% a tvevea ten : SSSA Mat fiance le 7 Peon » ; 1,860,000 ‘Win Company fabricated equipment f 7 pe fri tc en doa we than fomticcomp re ‘S 0s et dng 3019. The Fished Goods tetera Di ves Sire red 306000 D, Factory overhead forthe period amounted to PI.200,099, 88000 nits Dae tothe fabrication ofthe office Fenda PoGucton op 08,000 euiennt, Tenn 2018, The ffs etupment i tobe charset wir he ons ese Pesteed tut EY BOOMS is 50,099 ry that were not produced. What is the Ugish would ave bce” Units only dua 15,000 units the cast ofthe eqn Have be oS ny ating be Me apportionnncne tes 29 the *L P1,100,000. —-B.P1,400,000 ©.P1.460,000 ney me OF factory -P2.300,009 ofthe finasan Crane ined the following expenditures in 2019: soon Conca and 77,890,000 Land survey ‘osfo00 Fees for serch file for land 12.000 ‘aiding pen ioe 7,000 “Temporary quarters of construc crews 215,000 5 CCostof demolition of od building 940000 Excavation of baseett 200,000 Delinquent property 1a on fnd assumed 40,00 Dividends 100,000% Damages add for nue sustained in constuction (ho surance eared) 1.000 Cost of consirution $8,00,000 5 Cos of paving ad parking lot ‘00,000 _—-Cost fs, tees and oer andeaping «60,900 BBA oto lond? A.P8OI8NOD ——RLPRBE, C00 PGIROND——_—. PIOA¥8 000 (Bsr te cast of the land improvement? ‘A. P6.000 "8 P80,000, .P1460900 ——_—p.PLs00. 00 [) 25a iste cost ofthe ing? ‘A.P38,160,000 BL DSB252000 ——C.P58.485,000 Dp. P59,425,000 Jira Comey winked act epi nt Wind L Cti OA a frame sequent fon Camoay Yor ILM. Tie tl celoty ee ames ‘ced PAO Tie si af bes ul PL Rome 7h Enea Te Ta cen eeepc eee ee feces a ae nm ed stl cts sc eo C AC eicthmmon eat retort minting i am ey Sey ce cee wm pt hh lt ah tern Seed te am ils aa wa for 28 and 29 ; ‘Sorn Corp. and Sin Co. bad an exchenge of productive assets. The following are the relevant information: SomCorp.(Builina) Sin Co, (Equipment) Cost ofthe asset exchanged 90,900 800,000, ‘Accurnlate depreciation 540,000, 0,000 Fair value ofthe asset exchanged 400/000 350,000 recived (pai) 50,000 (50,000) here is a commercial substance, how much iste eyaipment that will be record by Sor Corp.? ‘A, P3500 'B.P360,000 C.Pago,c00 D.P450.000 Kivereisno commercial substance, what isthe amount of building thet willbe record by Sin Co, ‘AP 350,000 1B. P400,000 €.P480,000 D,Ps30,000 300033 Dae ice Aan Cry. oats opens ey a 219 During of ie meats, Unil We Me vat ote cat ri sca of eng td Eis Goosen ee Asan tlt, and the camry beta epeing ai on Ap 308. Be eae sd atl aren ors of be Uutation oped pry, Pan Se os cr account and recorded debits and (credits) to this account as follows: (laesmnctes emia ee Co ty za» a dase pri ie Pd ile pres lane a 6 er Ter | |Paid exeavation costs for the new builing 150,000 ¢ ‘Made the first payment to the contractor 2,500,000 © Niforemapmen tbs nna in th new bukng Wag 000 maiStom ale ofmivened acrls fom detshing the ldbuléng (68.000) i Nain pryen he Bling contac sooo | Caplets on eostocton fan . een Pald fight on enupmeat chased ipo Paid ustllaon co ofequest i200 Pair epaleunt aged ding itlsion : . PPE Ledger Balance 9 30fow much the correct cot ofthe and? 7 A. P1,717,000 B. P1,929,000 C. P2,149,000 D. P2,011,000, 3ieAfow much isthe correct cost ofthe land improvement? AON PISO 800 B.PR2,000 1. P68,000 D.P.o- Dy _ Seto much is the coret ost ofthe lng? ‘ "A'P6S12,000—BLP6,S02,000 ——_C. P6,380,000 6,000,000 D. @r.ttow muck i the correct cost ofthe operating equiprnent? SS PLAB0,000-——RLPH,SO7,009——C,PL,541,000 D.PI,S68,000 P34 Bon Company has recently purchased a computer system for its office. The following information was “gainer in rolation tthe asquistion of he unit is price 304,000.00 Trade discount and chats taken 112,000.00 Installation and assembly cost, 6,400.00 Initial dliery sod banding cost 12'800.00 Purchase discount What isthe acquisition cos ofthe new computer? ‘4 PISS 160 'B.207,360 .P211,360 2321200 {)-34-The Del Co imported sn equipment at a yeso equivaent to £330,000, The company hast pay ations ‘ost of importing the asst such a8 PIO,000 import utes and 15,000 non-refundable purchase taxes. Cost of ‘ringing and preparing the asset for is intended wee include P2,000 transportation cast, 4,000 installation and testing and tal rn costs low much i te tll cost ofthe new enuipment? ‘A. P330,000 B, P336,000 C.P346,000 .P361,000 ‘- (88. On January 2, 2019. | Found You Conportion leased six coraputers For use ia its engincering departrxent. Se ease period isfve years and the estnated economic life ofthe leased property is six years. The lease dows not contain automat te tasfer and a bargain purcnse con, Annual lease payznens ae payable in accs every January 2 inthe amount of P9000. The incremental borrowing rate for 1 Found You pron i 12% a the ipl ites rate in the Tee 10% The company wes sraighelne eps spe fequpmet (se wo desi pes forthe PV fos) What he eptaled APE a00 3B. P3,00 €.P83,000, D.P375,300 — End of Exansina. God bless © Don’t be affad, Just believe (Matk 5:36) eotnennE. Sed J) Covcentmte == Bray <= Ach #NABergonia2020 mee it ‘ACCO 20083: Proper, Pant and Beco: ‘00 20088: Property, Plant and Eaxiomo=s