1.

On May 1, 2001, Patrivo Corporation purchased for P690,000 a tract of land on which a warehouse and
office building were located. The following data were collected concerning the property:

Current Assessed Vendor's

Valuation Original Cost
Land ............................. P280,000 P180,000
Warehouse ........................ 320,000 315,000
Office Building .................. 200,000 129,000
P800,000 P624,000

Determine the appropriate amounts that Patrivo should record for the land, warehouse, and office
building. 4 points

2. Leyba Excavating purchased a bulldozer on June 1, 2002. The following information regarding this asset
and its acquisition is available:

Cost ................................................. P380,000

Residual value ....................................... P30,000
Estimated useful life ................................ 8 years
Estimated service hours .............................. 60,000

The bulldozer was operated for a total of 6,100 hours in 2002 and 8,200 hours in 2003. It is company
policy to take a half-year's depreciation on all assets in the year of acquisition.

Compute the depreciation expense for 2002 and 2003 under each of the following methods:

(1) Double-declining-balance 2 points

(2) Sum-of-the-years'-digits 2 points
(3) Straight-line 2 points
(4) Service hours (round rate to the nearest cent) 2 points