MARTIN AUD314 Recognition and Depreciation

Yellow Jack Corporation
Cost Salvage Value Useful Life

Building ₱ 6,100,000.00 -₱ 100,000.00 ₱ 6,000,000.00 20
Machinery 2,550,000.00 - 50,000.00 2,500,000.00 5
Equipment 1,030,000.00 - 30,000.00 1,000,000.00 10
₱ 9,680,000.00 -₱ 180,000.00 ₱ 9,500,000.00
1. Composite Rate 900,000/9,680,000

9.30%
2. Composite Life 9,500,000/900,000

10.56
Useful Life
₱ 300,000.00
500,000.00
100,000.00
₱ 900,000.00 3. Depreciation Expense, 2024
Hot Issue, Inc.
No. 1 (Retirement Method)

No. of tools disposed 300
Multiply: Cost of earlier purchases 40.00
Total tools disposed 12,000.00
Less: Proceeds from disposal
(300 x 10) 3,000.00
Depreciation, 2024 ₱ 9,000.00
500 tools x P40

(800 tools - 300 tools) 20,000.00
200 tools x P60
(500 tools + 400 tools - 700 tools) 12,000.00
Total Cost of tools retired, 2025 ₱ 32,000.00
Tools disposed 32,000

(700 x 14) 9,800.00
No. 2 (Replacement Method)

300 x 60 18,000.00
(300 x 10) 3,000.00
700 x 80 56,000.00
(700 x 14) 9,800.00
No. 3 Inventory Method

Inventory, 01/01/2024
(800 * 40) 32,000.00
Purchases
(400*60) 24,000.00
Less: Inventory, 12/31/2024 40,000.00
Selling Price 3,000.00
Inventory, 01/01/2025 40,000.00

Purchases
(900*80) 72,000.00
Less: End tools 35,000.00
Elite Company
No. 1 (Retirement Method)

Tools Disposed
(900,000/20) ₱ 45,000.00
Multiply: Cost of earlier purchase 4.00
Less: Proceeds from disposal 10,000.00
Depreciation, 2025 ₱ 170,000.00
Tools Disposed
(900,000/20) ₱ 45,000.00
Depreciation, 2026 ₱ 615,000.00
Tools Disposed
(900,000/20) ₱ 45,000.00
No. 2 (Replacement Method)

Tools Disposed 4
Multiply: Cost of earlier purchase ₱ 50,000.00
Total tools disposed 200,000.00 -
Depreciation, 2025 ₱ 190,000.00
Tools Disposed 12
Multiply: Cost of earlier purchase ₱ 46,500.00 ₱ 558,000.00
Tools Disposed 2
Multiply: Cost of earlier purchase ₱ 45,000.00 90,000.00
Depreciation, 2026 ₱ 633,000.00
Tools Disposed 2
Multiply: Cost of earlier purchase ₱ 45,000.00
No. 3 Inventory Method
Inventory, 01/01/2025 ₱ 900,000.00
Purchases
(20*50,000) 1,000,000.00
Less: Inventory, 12/31/2025 1,455,000.00
Depreciation, 2025 ₱ 435,000.00
Jake Company
Invoice price ₱ 800,000.00

Less: Discount
(800,000 x 5%) - 40,000.00
Add: Freight 25,000.00
Installation 40,000.00
Initial cost 825,000.00
Less: Residual value - 50,000.00
Depreciable cost 775,000.00
Divide: Useful life 8
Depreciation ₱ 96,875.00
Initial cost 825,000.00

Less: Depreciation 96,875.00
Carrying amount, December 31, 2025 ₱ 728,125.00
Cane Company
Fair value of asset given up 1,200,000.00

Cash received - 500,000.00
Initial measure ₱ 700,000.00
Dubai Corporation
No. 1
Cash paid to purchase a land with an old building ₱ 660,000.00
Mortgage assumed on the land purchased 240,000.00
Commission paid to real estate agent 150,000.00
Special assessment for public improvement 25,000.00
Property taxes on land covering the period 2023 – 2025 160,000.00
Adjusted Balance of land ₱ 1,235,000.00
No. 2
Building construction labor costs 800,000.00
Building construction materials 672,000.00
Cost of temporary fencing the property 28,000.00
Architect’s fees 112,500.00
Excavation expenses 135,000.00
Fixed overhead charged to the building 300,000 300,000.00
Interest expense on construction loan during construction 150,000.00
Cost of razing the old building 120,000.00
Salvage proceeds from demolished building - 15,000.00
Adjusted balance of building ₱ 2,302,500.00
No. 3
Invoice cost of machinery acquired 381,000.00
Freight, unloading, and delivery charges 22,500.00
Cost of testing and trial run 20,000.00
Proceeds from sale of produce of the machinery test runs - 3,500.00
Adjusted balance of machinery ₱ 420,000.00
No. 4
Cost of paving driveway and parking lot ₱ 70,000.00
No. 5
Searching for applications of new research findings 57,000.00
Laboratory research aimed at discovery of new knowledge 204,000.00
Testing for evaluation of new products 72,000.00
Materials consumed in research and development projects 177,000.00
Consulting fees paid to outsiders for research and projects 300,000.00
Personnel costs of persons involved in research and development
projects 384,000.00
Adjusted balance of research and development expense ₱ 1,194,000.00
Body Company
Purchase price of the land ₱ 1,200,000.00

Clearing and grading the land before construction 150,000.00
Various closing costs in connection with acquiring the
land 40,000.00
Cost of land ₱ 1,390,000.00
Demolition and removal of old building 80,000.00

Architect fee for the plans for the new building 50,000.00
Payment to contractor for building construction 3,250,000.00
Cost of building ₱ 3,380,000.00
Machinery purchased 850,000.00

Freight charges on machinery 30,000.00
Cost to build special platform and install wiring for the
machinery 10,000.00
Cost of trial runs and ensure proper installation of the
machinery 20,000.00
Cost of machinery ₱ 910,000.00
Paradise Company
Cash paid for purchase of land ₱ 2,500,000.00

Mortgage assumed on the land purchased, including interest accrued 1,000,000.00
Realty commission 300,000.00
Legal fees, realty taxes and documentation expenses 50,000.00
Amount paid to relocate persons squatting on the land acquired 100,000.00
Capitalized cost of land ₱ 3,950,000.00
Cost of tearing down an old building on the land to make room for
construction ₱
200,000.00
Salvage value of the old building demolished - 50,000.00
Amount paid to the contractor for the building constructed 5,000,000.00
Building permit fee 50,000.00
Excavation 50,000.00
Architect fee 200,000.00
Capitalized cost of building ₱ 5,450,000.00
Invoice cost of machine acquired ₱ 2,000,000.00

Freight, unloading and delivery charges on the machine acquired 60,000.00
Custom duties and other charges on the machine acquired 140,000.00
Allowances and hotel accommodation paid to foreign technicians during
installation 400,000.00
Capitalized cost of machinery ₱ 2,600,000.00
Trees, shrubs and other landscaping ₱ 200,000.00

Parking bays 350,000.00
Cost of fencing the property after completion of construction 250,000.00
Capitalized land improvement ₱ 800,000.00
Poling Down Company
Acquisition Cost Residual Value Useful life

Machine 1 ₱ 8,000,000.00 ₱ 400,000.00 ₱ 7,600,000.00 25
Machine 2 3,900,000.00 390,000.00 ₱ 3,510,000.00 10
Machine 3 800,000.00 100,000.00 ₱ 700,000.00 12
12,700,000.00 890,000.00 11,810,000.00
Composite life 11,810,000/713,333.333

16.56
Composite rate 713,333.33/12,700,000

5.62%
304,000.00
351,000.00
58,333.33
713,333.33
Bortah
Materials and parts purchased subject to a 2%

discount that was not taken
(2,000,000 x 98%) ₱ 1,960,000.00
Labor cost 1,900,000.00
Allocated overhead cost 500,000.00
Installation cost 40,000.00
Total cost of equipment ₱ 4,400,000.00
Piling Company
Cost of machinery retired 8,450,000.00

Less: Proceeds from retirement 5,200,000.00
Accumulated Depreciation ₱ 325,000.00
Feista Company
Depreciable amount ₱ 3,300,000.00

Add: Government grant 300,000.00 ₱ 3,600,000.00
Less: Residual value - 250,000.00
335,000.00
Add: (300,000/10) 30,000.00
Depreciation, 2023 ₱ 365,000.00
Secrets Inc.
No. 1
Cost of land, which included an old apartment building ₱ 6,160,000.00
Delinquent property taxes assumed by Secrets, Inc. 60,000.00
Assessment by the city for drainage project 50,000.00
Survey costs 40,000.00
Assessment by the city for drainage project 30,000.00
Cost of grading and leveling 100,000.00
Total cost of land ₱ 6,440,000.00
No. 2
Cost of razing the apartment building 80,000.00
Payments to tenants to vacate the apartment building 40,000.00
Architect's fee on new building 120,000.00
Building permit for new construction 80,000.00
Excavation Cost 200,000.00
Payment to building contractor 20,000,000.00
Temporary quarters for construction crew 160,000.00
Temporary Building to house tools and materials 100,000.00
Cost of changes during construction to make new building more energy efficient 180,000.00
Interest cost on specific borrowing incurred during construction 720,000.00
Premium for insurance on building during construction 60,000.00
Total cost of building ₱ 21,740,000.00
Blackpink Company
Cost of building 1,520,000.00 Land 760,000.00

Cost of remodeling 800,000.00 Building 1,520,000.00
Water system 64,000.00 2,280,000.00
Driveways and sidewalks 204,000.00
Fences 100,000.00
Adjusted balance of building ₱ 2,320,000.00
No. 2
Invoice price ₱ 700,000.00
Less: Discount
(700,000 x 2%) -₱ 14,000.00
Add: Freight 8,000.00
Initial cost ₱ 694,000.00
Fraction
1/3
2/3
Leonicus Corp.
List price ₱ 152,000.00

Trade discount taken - 56,000.00
Concrete slab poured as a base for the computer 43,200.00
Transportation costs 6,400.00
Acquisition cost of computer ₱ 145,600.00
Tilt Company
Ordinary shares 20,000.00

Multiply: Fair value per share 30.00
Initial cost of newly acquired land ₱ 600,000.00
Succesive discount
Formula used: y + z - (yz/100)

5 + 10 - [(5 x 10) / 100]
14.5 %
14.5 + 15 - [(14.5 x 15) / 100]

Discount rate 27.325 %
Market price 550,000.00

Multiply: Discount rate 0.27325
Discount amount 150,287.50
Market price 550,000.00

Add: Cost of freight and installation 12,000.00
Proceeds from sale of old computer 8,000.00
₱ 570,000.00
Less: Discount - 150,287.50
₱ 419,712.50
Benguet Company
Market value ₱ 240,000.00

Cost of removing the old machine 2,000.00
Cost of spare parts purchased and set aside from breakdowns during
the first two years of normal use of the machine 20,000.00
Cost of labor to install the machine 4,000.00
Cost of testing machine prior to use 1,800.00
Cost of hauling the machine from the vendor’s place of business to
the company’s premises 5,000.00
Capitalized cost of the machine ₱ 272,800.00
Luka Company
Cost of demolition of old building ₱ 20,000.00

Architect fees 30,000.00
Contractor fee 220,000.00
Cost of new building ₱ 270,000.00
Utah Corporation
Cost on list 2,000,000.00

Add: Installation cost 70,000.00
Initial cost 2,070,000.00
Deduct: Salvage value - 100,000.00
1,970,000.00
Divide: Useful life 10.00
Depreciation expense ₱ 197,000.00
Wan Company
Invoice price 4,500,000.00

Less: Discount price
(4,500,000 x .02) 90,000.00
Price paid 4,410,000.00
Add: Delivery fee 80,000.00
Installation fee 310,000.00
Cost of machine ₱ 4,800,000.00
Divide: useful life 5.00
₱ 960,000.00
Madison Square Garden Company
No. 1
Land - 01/01/2023 4,000,000.00 Cost of issued s
Add: Land acquired for cash 2,000,000.00
Land acquired by issuing shares
[(2/10) x (200,000 x 45)] 1,800,000.00
Land - 12/31/2023 ₱ 7,800,000.00
No. 2
Land improvements - 01/01/2023 1,300,000.00
Add: Expenditures for parking lot, street and
sidewalks 1,200,000.00
Land improvements - 12/31/2023 ₱ 2,500,000.00
No. 3
Building - 01/01/2023 20,000,000.00
Add: Building acquired by issuing shares
[(8/10) x (200,000 x 45) 7,200,000.00
Building - 12/31/2024 ₱ 27,200,000.00
No. 4
Machinery and Equipment - 01/01/2023 8,000,000.00
Add: Machinery and equipment purchased 4,000,000.00
Freight and unloading 100,000.00
Installation cost 300,000.00
Less: Machinery scrap - 200,000.00
Machinery sold - 700,000.00
Machinery and Equipment - 12/31/2023 ₱ 11,500,000.00
9,000,000.00
Romania Company
No. 1
Purchase Price 700,000.00
Add: Freight cost 20,000.00
Handling costs 10,000.00
730,000.00
Dismantling cost 80,000.00
Multiply: PV of P1 at 6% for 5 periods 0.747 59,760.00
Initial cost of equipment ₱ 789,760.00
No. 2
Initial cost of equipment ₱ 789,760.00
Total 157,952.00
Add: Interest expense
(59,760 * 6%) 3,585.60
Total expenses ₱ 161,537.60 or P161, 538
Brazil Company
Invoice price 2,200,000.00

Add: Installation cost 5,000.00
Freight cost 8,000.00
Cost of furnitures and fixtures 2,213,000.00
Less: Salvage Value - 221,300.00
1,991,700.00
Multiply: Depreciation rate 40%
Depreciation expense, 2022 ₱ 796,680.00
Depreciation Rate 40%
Salvage value 221,300.00
Kisses Company
Cash price of first machine 4,700,000.00

Add: Cost of second machine 1,585,000.00
Cost of third machine 1,360,000.00
Old machine 1,800,000.00
Cost of machineries acquired ₱ 9,445,000.00
Marissa Company
No. 1
Cash paid for purchase of land ₱ 2,500,000.00
Mortgage assumed on the land purchased, including interest accrued 1,000,000.00
Realtor commission 300,000.00
Legal fees, realty taxes and documentation expenses 50,000.00
Amount paid to relocate persons squatting on the property 100,000.00
Cost of Land 3,950,000.00
No. 2
Cost of tearing down an old building on the land ₱ 200,000.00
Salvage value of the old building demolished - 50,000.00
Amount paid to the contractor for the building constructed 5,000,000.00
Building permit fee 50,000.00
Excavation fee 50,000.00
Architect fee 200,000.00
Cost of building 5,450,000.00
No. 3
Invoice cost of machine acquired ₱ 2,000,000.00
Freight, unloading and delivery charges 60,000.00
Custom duties and other charges 140,000.00
Allowances and hotel accomodation 400,000.00
Cost of machine 2,600,000.00
Olivia Company
Cash price of the equipment, VAT inclusive of 12% ₱ 2,200,000.00

Add:Initial delivery and handling cost 200,000.00
Cost of site preparation 600,000.00
Consultant used for advance on the acquisition of equipment 700,000.00
Estimated dismantling cost that may be incurred upon retirement 300,000.00
Cost of equipment 4,000,000.00
Shantal Company
Cash price of the equipment, VAT inclusive of 12% ₱ 2,500,000.00

Add: Initial delivery and handling cost 200,000.00
Cost of site preparation 600,000.00
Consultant used for advance on the acquisition of equipment 700,000.00
Estimated dismantling cost that may be incurred upon retirement 300,000.00
Cost of equipment ₱ 4,300,000.00
Dinara Company
FV of land acquired by issuing of shares ₱ 2,000,000.00

Add: Special assessment 50,000.00
FV of donated land 1,800,000.00
Cost of land acquisition ₱ 3,850,000.00
Lene Company
Accumulated Depreciation - January 01, 2009 ₱ 5,000,000.00

Less: Accum Depn. From sold equipment
[5,000,000 - (3,000,000 + 400,000] - 1,600,000.00
Depreciation Expense 2,800,000.00
Accumulated Depreciation - December 31, 2009 ₱ 6,200,000.00
Marla Company
Purchase price net of discount
(2,800,000 -140,000) ₱ 2,660,000.00
Add: Direct cost
(50,000 + 20,000 + 30,000) 100,000.00
Cost of equipment ₱ 2,760,000.00
Buster Co. & Biter Co.
No. 1
Fair value of asset given up ₱ 220,000.00
Less: Carrying amount of asset given up 192,000.00
Gain on change ₱ 28,000.00
#2
Fair value of asset given up 220,000.00
Less: Cash received - 10,000.00
Initial cost of the new PPE ₱ 210,000.00
#3
Fair value of asset given up 210,000.00
Add: Cash paid 10,000.00
Initial cost of the new PPE ₱ 220,000.00
Pingson Company
Carrying amount at the date of change 260,000.00

Less: Salvage
Divide: valueUseful life
Remaining - 30,000.00
[(300,000/10,000)x80%]-4 years 20
Shin Min Ah Company
Freight paid on the new equipment ₱ 250.00

Installation costs of the new equipment 430.00
Testing costs before the equipment was put to regular operation 295.00
Estimated cost of manufacturing similar equipment in the
company's own plant, including overhead 13,800.00
Cost of the new equipment ₱ 14,775.00
Doug Airlines
Purchase through issuance of note, the cost is the present value of principal and nominal interest or the cash price
Bonnie Bailey Incorporated
Initial cost 1,500,000.00
Office equipment 1,500,000.00

Cash 100,000.00
Share premium- DC 1,400,000.00
Initial Cost 1,500,000.00

Residual Value - 150,000.00
Depreciable amount 1,350,000.00
Fraction 5/15
Annual depreciation 450,000.00
July 1 - December 31 6/12
Bobtail Corporation
Depreciable amount ₱ 2,880,000.00

Divide: Annual Depreciation 180,000.00
Composite Life 16
Wirehair Company
General improvement to the lease premises with

useful life of 10 years 5,400,000.00
Shorter between (6 and 10 years) 6 years
Annual Depreciation 450,000.00
Age 4
Accumulated depreciation ₱ 900,000.00
Balinese Company
Initial cost of the asset ₱ 130,000.00

Less: Residual Value - 10,000.00
Depreciable cost 120,000.00
Fraction depreciated 12/15
Accumulated depreciation ₱ 96,000.00
Initial cost of the asset ₱ 130,000.00

Less: Accumulated depreciation 96,000.00
Carrying amount 34,000.00
Selling price 38,000.00
Gain on sale ₱ 4,000.00
Bengal Company
[(4,000,000 - 400,000) / 10 years] x 4 1,440,000.00
Original cost ₱ 4,000,000.00

Accumulated depreciation 1,440,000.00
Carrying amoount at beg. Year of change ₱ 2,560,000.00
[(2,560,000 -460,000) / (8yrs - 4yrs)] ₱ 525,000.00

Birman Company
Cost ₱ 9,000,000.00
Less: Accumulated Depreciation -
Carrying amount 9,000,000.00
Multiply: Depreciaion rate 0.40
Depreciation Expense ₱ 3,600,000.00
Cost ₱ 9,000,000.00
Less: Accumulated Depreciation - 3,600,000.00
Carrying amount 5,400,000.00
Multiply: Depreciaion rate 0.40
Depreciation Expense ₱ 2,160,000.00
Carrying amount at date of change

(9M - 3.6M - 2,160,000) ₱ 3,240,000.00
(3,240,000 - 600,000) / 3 years ₱ 880,000.00
Accumulated depreciation Year 1 ₱ 3,600,000.00

Add: Accumulated depreciation Year 2 2,160,000.00
Accumulated depreciation Year 3 880,000.00
Total ₱ 6,640,000.00
Japanese Bobtail Company
Cost ₱ 1,700,000.00
Less: Residual Value - 50,000.00
Depreciable amount 1,650,000.00
Multiply: Fraction of Depreciation 8/55
Depreciation expense ₱ 240,000.00
Pacific Corporation
Land Warehouse Office Building

Purchase price ₱ 2,700,000.00 ₱ 2,700,000.00 ₱ 2,700,000.00
Multiply: Relative FV ratio 875/2,250 375/2,250 1,000/2,250
Cost allocated ₱ 1,050,000.00 ₱ 450,000.00 ₱ 1,200,000.00
Less: Residual value - 45,000.00 - 120,000.00
Depreciable amount 405,000.00 1,080,000.00
Multiply: Fraction 10/55 10/55
Months depreciated 9/12 9/12
Depreciation expense ₱ 55,227.27 ₱ 147,272.73
Black Racer Company
Face amount of the note per period ₱ 1,000,000.00

Multiply: PV Factor 3.4651
Present value of the principal 3,465,100.00
Add: Down payment made 1,000,000.00
Total 4,465,100.00
Multiply: Depreciation rate
(150% / 5 years) 30%
Annual depreciation 1,339,530.00
May 1 - December 31 8/12
Depreciation first year ₱ 893,020.00
Banded Water Company
Fair value of asset received ₱ 32,000.00
Cash price or fair value of asset received ₱ 32,000.00

Less: Cash paid - 19,000.00
Assumed fair value of asset given up ₱ 13,000.00
Fair value of the PPE given up ₱ 13,000.00

Less: Carrying amount of PPE given up - 10,000.00
Gain or (loss) on exchange transaction ₱ 3,000.00
Mimz Bernanz Company
Case 1:
Fair value of asset given ₱ 85,000.00
FV of the PPE given up ₱ 85,000.00

Less: Carrying amount of the PPE given up 75,000.00
Case 2:
Carrying amount of asset given 50,000.00
No gain or loss if the transaction is without commercial

substance
Exile Company
No. 1
Fair value of asset received ₱ 35,000.00
No. 2
Cash price or Fair value of asset received ₱ 35,000.00
Less: Cash paid - 25,000.00
Assumed fair value of asset given up ₱ 10,000.00
Fair value of the PPE given up ₱ 10,000.00

Less: Carrying amount of the PPE given up - 8,000.00
Case 1:
500,000 / 10 ₱ 50,000.00
Case 2:
500,000 / 6 ₱ 83,333.33
Beastheart Corporation
Land Building
Cash paid on purchase of land 220,000.00
Demolition of a building erected on the purchased land 100,000.00
Legal fees for the land acquisition 25,000.00
Interest on loan for construction 27,000.00
Labor and materials for construction of the building 500,000.00
Architect's fees for building 37,000.00
Excavation expense 45,000.00
Fixed ovverhead charged to the building 100,000.00
Cost of temporary safety fence 50,000.00
Insurance on building during the construction 10,000.00
Payment to squatters to vacate the premises 30,000.00
Cost of temporary quarters for construction crew 50,000.00
Property taxes on land covering the period 2019 - 2022 60,000.00
Special assessments 25,000.00
Cost of option paid to buy the land 15,000.00
Landscaping cost
Cost of paving driveway and parking lot
Proceeds from sale of salvage materials - 30,000.00
Total ₱ 565,000.00 ₱ 919,000.00
Thick Company
Cost Building
Cost
(35,360 x 125 = 4,420,000) ₱ 884,000.00 ₱ 3,536,000.00
Mortgage 800,000.00 3,200,000.00
Real Property taxes 36,000.00 144,000.00
Remolding 870,000.00
Repairs prior to use 45,000.00
Total ₱ 1,720,000.00 ₱ 7,795,000.00

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Yellow Jack Corporation

Cost Salvage Value Useful Life

1. Composite Rate 900,000/9,680,000

2. Composite Life 9,500,000/900,000

No. 1 (Retirement Method)

500 tools x P40

Tools disposed 32,000

No. 2 (Replacement Method)

No. 3 Inventory Method

Inventory, 01/01/2025 40,000.00

No. 1 (Retirement Method)

No. 2 (Replacement Method)

Invoice price ₱ 800,000.00

Initial cost 825,000.00

Fair value of asset given up 1,200,000.00

Purchase price of the land ₱ 1,200,000.00

Demolition and removal of old building 80,000.00

Machinery purchased 850,000.00

Cash paid for purchase of land ₱ 2,500,000.00

Invoice cost of machine acquired ₱ 2,000,000.00

Trees, shrubs and other landscaping ₱ 200,000.00

Acquisition Cost Residual Value Useful life

Composite life 11,810,000/713,333.333

Composite rate 713,333.33/12,700,000

Materials and parts purchased subject to a 2%

Cost of machinery retired 8,450,000.00

Depreciable amount ₱ 3,300,000.00

Cost of building 1,520,000.00 Land 760,000.00

List price ₱ 152,000.00

Ordinary shares 20,000.00

Formula used: y + z - (yz/100)

14.5 + 15 - [(14.5 x 15) / 100]

Market price 550,000.00

Market price 550,000.00

Market value ₱ 240,000.00

Cost of demolition of old building ₱ 20,000.00

Cost on list 2,000,000.00

Invoice price 4,500,000.00

Invoice price 2,200,000.00

Cash price of first machine 4,700,000.00

Cash price of the equipment, VAT inclusive of 12% ₱ 2,200,000.00

Cash price of the equipment, VAT inclusive of 12% ₱ 2,500,000.00

FV of land acquired by issuing of shares ₱ 2,000,000.00

Accumulated Depreciation - January 01, 2009 ₱ 5,000,000.00

Carrying amount at the date of change 260,000.00

Freight paid on the new equipment ₱ 250.00

Initial cost 1,500,000.00

Office equipment 1,500,000.00

Initial Cost 1,500,000.00

Depreciable amount ₱ 2,880,000.00

General improvement to the lease premises with

Initial cost of the asset ₱ 130,000.00

Initial cost of the asset ₱ 130,000.00

[(4,000,000 - 400,000) / 10 years] x 4 1,440,000.00

Original cost ₱ 4,000,000.00

[(2,560,000 -460,000) / (8yrs - 4yrs)] ₱ 525,000.00

Carrying amount at date of change

Accumulated depreciation Year 1 ₱ 3,600,000.00

Land Warehouse Office Building

Face amount of the note per period ₱ 1,000,000.00

Fair value of asset received ₱ 32,000.00

Cash price or fair value of asset received ₱ 32,000.00

Fair value of the PPE given up ₱ 13,000.00