BM1706

Name: DATE: SCORE:____________

COLLABORATIVE TASK

PART I. Analyze and answer the given problem. Use a 10-column worksheet for the solution. (5 points)

On March 1, 20X1 J Co. acquired a machine from N Co. under the following terms:

List price of machine P 82,000

Import duty 1,500
Delivery fees 2,050
Electrical installation costs 9,500
Pre-production testing 4,900
Purchase a five-year maintenance contract for plant 7,000

In addition to the information above, J Co. was granted a trade discount of 10% on the initial list price of the
asset and a settlement of 5% if payment for the machine was received within one (1) month of purchase.
The company paid the plant on March 25, 20X1.

Required: Compute for the cost of machinery.

PART II. The following are the expenditures and receipts related to land, land improvements, and building
acquired for use in a business enterprise. The receipts are enclosed in parentheses.
(a) Money borrowed to pay building contractor (signed a note) - (P275,000)
(b) Payment for construction from note proceeds - P275,000
(c) Cost of land fill and clearing - P8,000
(d) Delinquent real estate taxes on property assumed by purchaser - P7,000
(e) Premium on 6-month insurance policy during construction - P6,000
(f) Refund of one-month insurance premium due to early completion of construction - (P1,000)
(g) Architect’s fee on building - P22,000
(h) Cost of real estate purchased as a plant site (land P200,000 and building P50,000) - P250,000
(i) Commission fee paid to real estate agency - P9,000
(j) Installation of fences around property - P4,000
(k) Cost of razing and removing building - P11,000
(l) Proceeds from salvage of demolished building - (P5,000)
(m) Interest paid during construction on money borrowed for construction - P13,000
(n) Cost of parking lots and driveways - P19,000
(o) Cost of trees and shrubbery planted (permanent in nature) - P14,000
(p) Excavation costs for new building - P3,000

Required: Identify the characteristics of each item by writing its cost to their corresponding account title. All
receipts must be reported in parentheses. For amounts entered in Other Accounts column, indicate its
account title. (16 items x 2 points)

Item Land Land Improvements Buildings Other Accounts

Rubric for grading

PERFORMANCE INDICATORS POINTS
Correct accounts and amounts used 3
Computed final amounts are correct/balanced 2
TOTAL 5

04 Activity 1 *Property of STI

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