GROUP 2:

Corumbrillo, Julienne Jane A.

Marcoleta, Leane Mae DL.
Rempillo, Maria Vanessa Joy G.
San Jose, Bea Maria Alexisse M.
Viana, Mojan Joseph D.
CHAPTER 5: PROPERTY, PLANT AND EQUIPMENT

THEORIES:        
  MC1. A MC8. B MC15. B MC22. B MC29. C
  MC2. B MC9. C MC16. B MC23. D MC30. B
  MC3. D MC10. B MC17. D MC24. B MC31. D
  MC4. D MC11. B MC18. B MC25. D MC32. C
  MC5. C MC12. A MC19. D MC26. D MC33. C
  MC6. A MC13. D MC20. B MC27. C MC34. C
  MC7. C MC14. D MC21. D MC28. A MC35. D
           

PROLEMS:

MC36 Land ₱13,500,000

Land Improvement 1,500,000
Building 5,000,000 ÷ 20,000,000 × 14,400,000
Allocated Cost of Building 20,000,000 ₱ 3,600,000 D.

MC37 Purchase Price ₱ 200,000

Freight Charge 3,000
Installation Cost 6,000
Total Cost of New Cooler ₱ 209,000 C.

MC38 Equipment (1000 x 34) ₱ 34,000

Financial Asset at FVPL ₱ 30,000
Gain on Securities 4,000 D.
MC39 Carrying Amount ₱ 800,000
Salvage Value (20,000)
780,000
12/78 x 9/12 × 0.115384
Amount of Depreciation ₱ 90,000 D.

MC40 Carrying Amount ₱ 800,000

Accumulated Depreciation:
2016 90,000
2017 (78,0000 x 11.25/78) 112,500 (202,500)
Carrying Value in Statement of Financial Position ₱ 597,500 C.

MC41 Cost of Land ₱ 4,500,000

Land Survey Expense 30,000
Search of Land Title Expense 6,000
Total Cost of Land ₱ 4,536,000

Building Permit ₱ 10,000

Temporary House 50,000
Demolition Cost 40,000
Settlement Payment to Tenants 60,000
Interest on Construction Loan 90,000
Excavation Expenses 150,000
Cost of Paving Parking Lot 45,000
Construction Costs 9,800,000
Total Cost of Building ₱ 10,245,000 D.

MC42 Interest on Specific Borrowing (1,800,000 x 10% 6/12 months) ₱ 180,000

Interest Revenue on Investment Borrowing (45,000)
Net Interest 135,000
Iterest on General Borrowing: 2,500,000
(1,800,000)
700,000 × 9% 63,000
Capitalized Interest ₱ 198,000 C.
MC43 Interest on Specific Borrowing (4,000,000 x 10% x 6/12 months) ₱ 200,000
Interest on General Borrowing:
4,750,000
(4,000,000)
750,000 x 12% x 6/12 45,000
Capitalized Interest ₱ 245,000 C.

MC44 Face Value x Interest Rate ( 2,000,000 x 10%) ₱ 200,000

Face Value x Interest Rate (1,000,000 x 11%) 110,000
Capitalized Interest ₱ 310,000 C.

MC45 Fair Value ₱ 20,000

Cash Received (3,000)
Cost of Office Equipment ₱ 17,000

Fair Value ₱ 20,000

Cost - Accumulated Depreciation (40,000 - 30,000) (10,000)
Gain to be recognize ₱ 10,000 C.

MC46 Cash Price ₱ 20500

Cash Difference (6,000)
Total 14,500
Carrying Amount (16,800)
Loss on Exchange ₱ (2,300) B.

MC47 Total Depreciation cost (4,500,000 +1,320,000 +77,000 +53,000) ₱ 5,950,000

Total Depreciation Expense (112,500 + 66,000 + 9625 + 13,250 ) ÷ 201,375
Composite Life of the assets 29.5 years A.

MC48 Total Depreciation (112,500 + 66,000 + 9625 + 13,250 ) ₱ 201,375

Total Cost (4,800,000 + 1,400,000 + 82,000 + 53,000) ÷ 6,335,000
Composite Rate of Asset 3.18% A.
MC49 Total Cost ₱4,800,000
Estimated Residual Value (300,000)
Total 4,500,000
Estimated Useful Life ÷ 40
Depreciation on factory building ₱ 112,500 D.

MC50 Total cost of Small Tools ₱ 82,000

Estimated Residual Value (5,000)
Total 77,000
Sum of the years' digit × 6/36
Depreciation on small tools ₱ 12,833 C.

MC51 Machine Sold ₱ 130,000

240,000 - (240,000 - 12,000 / 120 months x 63) (120,300)
Gain on Sale of Machine ₱ 9,700 A.

MC52 Depreciation Cost ₱ 270,000

Useful life ÷ Summation of Useful life × 15/36
Depreciation Expense 112,500

Cost of PPE - Residual Value 270,000

÷ Useful life ÷ 8 years
Depreciation Expense 33,750

Depreciation Expense (SYD METHOD) 112,500

Depreciation Expense (STRAIGHT-LINE METHOD) (67,500)
Balance on Accumulated Depreciation ₱ 45,000 C.
MC53 1.5 1.5
÷ Useful life ÷5
Depreciation Rate 0.3

Cost of PPE ₱ 600,000

Multi: Depreciation Rate × 0.3
Multi: 1/2 × 1/2
Depreciation 90,000

Cost of PPE 600,000

Less: Accumulated Depreciation (90,000)
Basis for Depreciation 510,000
Multi: Depreciation Rate × 0.3
Depreciation year 2016 ₱ 153,000 B.

MC54 Total Cost - Salvage Cost ₱ 240,000

÷ Est. life in years ÷ 40 years
Annual Depreciation Charges ₱ 6,000

Total Cost 194,400

Multi: Constant Rate × 0.1
Annual Depreciation Charges ₱ 19,440

Total Cost - Salvage Cost 72,000

Useful life ÷ Summation of Useful life × 2/10
Annual Depreciation Charges ₱ 14,400 B.

MC55 Depreciation Cost ₱ 90,000

Useful life ÷ Summation of Useful life × 12/15
Accumulated Depreciation (SYD) 72,000

Depreciation Cost 90,000

Useful life ÷ Summation of Useful life × 2/15
Depreciation Expense in 2016 ₱ 12,000 A.
MC56 Original Cost - Carrying Amount ₱ 160,000
÷ Number of years lapsed ÷ 4 years
Depreciation Expense 40,000

Carrying Amount 240,000

Less: Accumulated Depreciation (40,000)
Present Value 200,000
Less: Amount Sold (65,000)
Recognize as Loss ₱ 135,000 C.

MC57 Original Cost - Accumulated Depreciation ₱ 480,000

Less: Carrying Value (300,000)
Impairment Loss ₱ 180,000 A.

MC58 Cost of PPE - Carrying Value (900,000 - 300,000) ₱ 600,000

÷ Useful life ÷ 3 years
Depreciation Expense 100,000

Cost of PPE 600,000

Depreciation Expense 100,000
Accumulated Depreciation ₱ 700,000 D.

MC59 Depreciation ₱ 42,000

Multi: Summation of Useful life × 55 years
Depreciable Cost 2,310,000
÷ Useful life ÷ 7 years
Depreciation Expense 330,000
Residual Value 5,000
Acquisition Cost ₱ 335,000 D.
MC60 Fair Value - Building ₱ 49,200,000
Residual value (43,755,000)
Total 5,445,000
Depreciation period ÷ 4.5 years
Annual Depreciation 1,210,000
Estimated Useful Life × 40 years
Depreciable Value 48,400,000

Fair Value - Building ₱ 49,200,000

Depreciable Value 48,400,000
Salvage Value ₱ 800,000 C.

MC61 Fair Value - Tract of Land ₱ 54,000,000

Salvage Value (6,000,000)
Estimated Cost of Restoration and Geological survey 7,200,000
Total 55,200,000
Extracted Tons of Ore ÷ 2,400,000
Depletion Expense per Ton ₱ 23 C.

MC62 Mineral Mine ₱ 3,400,000

Estimated Value (200,000)
Capitalized Development Cost 800,000
Total 4,000,000
Number of Tons ÷ 4,000,000
Price per Ton 1.00 per ton
Number of Tons Sold × 375,000
Depletion ₱ 375,000 A.
MC63 Mining Property ₱ 3,600,000
Estimated Tons ÷ 800,000
Price per Ton 4.50
Depletion for Tax Purposes × 60,000
Depletion ₱ 270,000

Equipment Cost ₱ 96,000

Selling Price (6,000)
Total 90,000
Estimated Tons ÷ 800,000
Total 0.1125
Depletion for Tax Purposes × 60,000
Depreciation Expense ₱ 6,750 B.

MC64 Depletion Expense for Quarry No. 1, 2016 (The asset is not owned.) 0

Quarry No. 2 ₱ 1,000,000

Estimated Selling Price (300,000)
Total Cost 700,000
Estimated Total Reserves (in tons) ÷ 100,000,000
Price per Ton 0.007
Tons Quarried in 2016 × 1,380,000
Depletion Expense for Quarry No. 2, 2016 ₱ 9,660 D.

MC65 Price per Ton 0.007

Tons Quarried Through 12/31/15 × 40,000,000
Price of Tons 280,000

Total Cost 700,000

Price of Tons (280,000)
Total 420,000
Estimated Recoverable Tons ÷ 20,000,000
Price per Recoverable Ton 0.21
Tons Quarried in 2016 × 1,380,000
Revised Depletion Expense for Quarry No. 2, 2016 ₱ 28,980 B.
MC66 Depreciable Amount (8,600,000 - 600,000) ₱ 8,000,000
Estimated Useful Life ÷ 40 years
Depreciation Expense for 2011 200,000
Useful Life until 2016 × 5 years
Accumulated Depreciation 2016 1,000,000

Cost of Building 8,600,000

Accumulated Depreciation 2016 (1,000,000)
Salvage Value (600,000)
Depreciation Expense for 30 years 7,000,000
Remaining Useful Life ÷ 30 years
Revised Depletion Expense for Quarry No. 2, 2016 ₱ 233,333 C.

MC67 Cost of Building - 2011 ₱ 8,600,000

Accumulated Depreciation 2016 (1,000,000)
Revised Depletion Expense for Quarry No. 2, 2016 (233,333)
Cost of Building - 2016 7,366,667

Building Selling Price 7,500,000

Cost of Building - 2016 7,366,667
Gain on Sale of Building ₱ 133,333 D.

MC68 Annual Depreciation ₱ 160,000

Multiply: × 10 years
Total 1,600,000

Original Cost 4,000,000

Subtract: (1,600,000)
Total 2,400,000

Building (Fair Value) ₱ 3,240,000

Subtract: (2,400,000)
Revaluation Surplus ₱ 840,000 C.
MC69 Original Cost ₱ 4,000,000
Annual Depreciation ÷ 160,000
Total 25 years

Building (Fair Value) 3,240,000

No. of Years Depreciated ÷ 15 years
Depreciation Expense ₱ 216,000 B.

MC70 Annual Depreciation ₱ 160,000

No. of Year Depreciated × 9 years
Depreciation Expense 1,440,000

Original Cost 4,000,000

Depreciation (1,440,000)
Building.Book Value 2,560,000

Building.Book Value 2,560,000

Impairment Loss (500,000)
Carrying Amount 2,060,000

Carrying Amount 2,060,000

No. of Year Depreciated ÷ 16 years
Depreciation Expense 128,750

Carrying Amount 2,060,000

Depreciation Expense (128,750)
Current Market Value 1,931,250

Impairment Loss 500,000

Less: (160000-128750) (31,250)
Book Value 468,750

Market Value (3240000-1931250) 1,308,750

Book Value (468,750)
Revaluation Surplus ₱ 840,000 B.
MC71 Computer Equipment ₱ 360,000
Useful Life ÷ 6 years
Depreciation Expense 60,000
Years Depreciated × 2.5 years
Depreciation Expense 150,000

Computer Equipment 360,000

Depreciation Expense (150,000)
Computer Current Value 210,000
Recovered Amount (70,000)
Impairment Loss ₱ 140,000 A.

MC72 Amount Recovered ₱ 70,000

Years Depreciated ÷ 3.5 years
Depreciation Expense 20,000

Amount Recovered 70,000

Depreciation Expense (20,000)
Carrying Amount ₱ 50,000 D.

MC73 Original Cost ₱ 1,800,000

Salvage value (600,000)
Depreciation 1,200,000

Depreciation 1,200,000
Useful life (60,000/3) 200,000
Accumulated Depreciation ₱ 1,400,000 C.
MC74 Depreciation cost ₱ 3,000,000
Residual Value (300,000)
Depreciable amount 2,700,000

Depreciable amount 2,700,000

Asset Life ÷ 10 years
Depreciation Expense 270,000

Depreciation Expense 270,000

Useful life × 4 years
Accumulated Depreciation 1,080,000

Cost 3,000,000
Accumulated Depreciation (1,080,000)
Book Value 1,920,000

Book Value 1,920,000

Less: Market Value (900,000)
Revaluation Surplus ₱ 1,020,000 C.

MC75 Book Value ₱ 1,920,000

Remaining useful life × 6 years
Depreciation Expense ₱ 270,000 B.