Land and Building

Fair value of shares (50,000 shares x 120) 6,000,000

Land and Building
Fair value of shares (50,000 shares x 120) 1,000,000
Welding Machine
New welding machine Invoice price 3,000,000
Discount not taken - 10% - 300,000 2,700,000
Total increase in PPE 9,700,000

First Machine
Downpayments 500,000
Four monthly installments 5,000,000 5,500,000
Second Machine
Present Value (500,000 x 3.49) 1,745,000
Third Machine
Present Value (2,000,000 x 0.68) 1,360,000
Total Cost 8,605,000
Fair value of old machine 1,800,000
Cash Payment 500,000
Cost of exchange machine 2,300,000

Cost Fraction Income

1st year 1,000,000 1/6 1,500,000
2nd year 2,000,000 1/3 3,000,000
3rd year 3,000,000 1/2 4,500,000
Total 6,000,000 9,000,000

Grant income, 2022 1,500,000

Carrying Amount 5,000,000

Cash payment 1,500,000
Total cost of oil inventory received 6,500,000
Total grant received 500,000
Income recognized in 2022 to 2023 (500,000 / 5 x 2) (200,000)
Deferred grant inncome - 2023 300,000

Grant income 500,000

Deferred grant income 300,000
Loss on repayment of grant 200,000

Cost of machine 6,600,000

Government grants (600,000)
Net cost 6,000,000
Residual value (500,000)
Depreciable amount 5,500,000

Depreciable Annual
Useful Life
Amount Expense
2022 5,500,000 10 550,000
2023 5,500,000 10 550,000
2024 5,500,000 10 550,000
2025 5,500,000 10 550,000
Note payable
Present value (5,000,000 x .751)
Discountt on note payable and deferred grant income

Cash
Discount on note payable
Note payable
Deferred grant inncome

Total grant income - 2022 (3,755,000 x 10%)

Purchase Price
Legal fees
Title guarantee insurance
Payment of property taxes in arrears
Special assessment for city improvements
Total cost of land
Cost of demolishing old building
Architect fee
New building construction cost
Building permit
Excavation before new construction
Liability insurance during construction
Total cost of new building

Average expidentures (30,000,000 / 2)

Specific borrowing
General borrowing
 12% 20-year bonds payable
8% 5year note payable
Total

Average capitalization rate (4,400,000/40,000,000)

Interest in specific borrowing (10% x 10,000,000)

Interest income
Interest in general borrowing (11% x 5,000,000)
Total capitalizable interest

Cash paid (896,000 - 96,000)

Cost of transporting machine
Cost of installation
Cost of testing machine
Cost of safety rails and platform
Cost of water device
Accumulated
Depreciation Cost of adjustment
550,000 Estimated dismantling cost
1,100,000 Total capitalized cost of machine
1,650,000
2,200,000
 January 1, 2022
April 1, 2022
December 1, 2022

5,000,000
3,755,000 LETTER D Average Expidentures, 2022
1,245,000 Applicable specific loan
Applicable general loan
5,000,000
1,245,000 Actual expidentures, 2022
5,000,000 Capitalizable interest, 2022
1,245,000

375,500 Total cost of building, 2022

Specific (10% x 3,000,000)

General (12% x 5,000,000)
Total capitalized interest, 2022

January 1, 2023
March 1, 2023

Average Expidentures, 2023

Applicable specific loan
Applicable general loan
4,000,000
150,000 Actual expidentures, 2023
50,000 Capitalizable interest, 2023
100,000
120,000
4,420,000 Total cost of building

Interest on general loan (25,000,00

 Capitalizable interest on general loa
Interest expense, 2023

January 1, 2023
March 1, 2023

Average Expidentures, 2023

Applicable specific loan
Applicable general loan

Actual expidentures, 2023

Capitalizable interest, 2023

Total cost of building, June 30, 202

300,000
950,000
8,000,000
150,000
200,000
100,000 Sale price
9,700,000 Less: Carrying amount of eqquipmen
Acquisition cost - 2019
Accumulated depreciation - 2021
Gain on disposal

15,000,000
- 10,000,000
5,000,000
Principal Interest
30,000,000 3,600,000
10,000,000 800,000
40,000,000 4,400,000

11%

1,000,000
- 100,000
550,000
1,450,000

Year
800,000 2022
30,000 2023
50,000 2023
40,000 2024
60,000 2025
80,000

75,000
65,000
1,200,000
 Expidentures Fraction
January 1, 2022 4,000,000 12/12
April 1, 2022 5,000,000 9/12
December 1, 2022 3,000,000 1/12
12,000,000

Average Expidentures, 2022 8,000,000

Applicable specific loan - 3,000,000
Applicable general loan 5,000,000

Actual expidentures, 2022 12,000,000

Capitalizable interest, 2022
Specific (10% x 3,000,000) 300,000
General (12% x 5,000,000) 600,000
Total cost of building, 2022 12,900,000

Specific (10% x 3,000,000) 300,000

General (12% x 5,000,000) 600,000
Total capitalized interest, 2022 900,000

Expidentures Fraction
January 1, 2023 12,900,000 12/12
March 1, 2023 6,000,000 10/12
18,900,000

Average Expidentures, 2023 17,900,000

Applicable specific loan - 3,000,000
Applicable general loan 14,900,000

Actual expidentures, 2023 18,900,000

Capitalizable interest, 2023
Specific (10% x 3,000,000) 300,000
General (12% x 14,900,000) 1,788,000
Total cost of building 20,988,000

Interest on general loan (25,000,000 x 12%) 3,000,000

Capitalizable interest on general loan - 1,788,000
Interest expense, 2023 1,212,000

Expidentures Fraction
January 1, 2023 12,900,000 6/6
March 1, 2023 6,000,000 4/6
18,900,000

Average Expidentures, 2023 16,900,000

Applicable specific loan - 3,000,000
Applicable general loan 13,900,000

Actual expidentures, 2023 18,900,000

Capitalizable interest, 2023
Specific (10% x 3,000,000 x 6/12) 150,000
General (12% x 13,900,000 x 6/12) 834,000
Total cost of building, June 30, 2023 19,884,000

Sale price 2,500,000

Less: Carrying amount of eqquipment
Acquisition cost - 2019 4,200,000
Accumulated depreciation - 2021 (4,200,000-200,000/5 x ) (2,400,000) 1,800,000
Gain on disposal 700,000

Cost Residual Value

Machine A 5,500,000 500,000

Machine B 2,000,000 200,000
Machine C 400,000
7,900,000

Composite life (7,200,000 / 450,000) 16 years

Total cost, beg 5,000,000

Cost of new asset acquired 2,500,000
Cost of asset sold - 1,000,000
Remaining cost, end 6,500,000

Depreciation for the year (25% x 6,500,000) 1,625,000

Depreciation
Book Value, year start Depreciable Cost Percent
7,600,000 7,200,000 5.5556%
7,182,000 7,200,000 21.5278%
Amount
4,000,000
3,750,000
250,000
8,000,000

Amount
12,900,000
5,000,000
17,900,000
Amount
12,900,000
4,000,000
16,900,000

Depreciable Annual
Useful life
amount depreciation
5,000,000 20 250000
1,800,000 15 120000
 400,000 5 80000
7,200,000 450000

Depreciation Accumulated Book Value,

Expense Depreciation year end
422,226 418,000 7,182,000 (3/12) x (8/36)
1,550,000 1,968,000 5,214,000 [(9/12) x (8/36)] + [(3/12) x (7/36)]
0.16666666 + 0.04861111
 Declining Depreciation Accumulated Book Value,
Book Value, beg rate Depreciation end
2022 5,000,000 40% 2,000,000 2,000,000 3,000,000
2023 3,000,000 40% 1,200,000 3,200,000 1,800,000

Book Value Residual Val Useful life Depreciation Accum. Dep

2024 1,800,000 600,000 5 400,000 400,000

Accumulated Depreciation, 2023 3,200,000

Accumulated Depreciation, 2024 400,000
Total Accumulated Depreciation, 2024 3,600,000

Acquisition cost 8,100,000

Residual - 600,000
Depreciable amount 7,500,000

Rate per unit (7,500,000 / 25,000) 300

Depreciation for 2023 (300 x 9,000) 2,700,000

Acquisition cost 26,400,000
Exploration cost 2,000,000
Development cost 1,600,000
Estimated restoration cost at PV 1,800,000
Total cost 31,800,000
Residual Value - 3,000,000
Depletable Amount 28,800,000

Rate per unit (28,800,000 / 1,200,000) 24

Depletion for the current year (80,000 x 24) 1,920,000

Purchase price 13,200,000

Residual value - 1,200,000
Depletable amount 12,000,000

Production from July 1 to Dec. 31, 2022 (25,000 x 6) 150,000

Depletion rate (12,000,000 / 1,500,000) 8
Depletion, 2022 1,200,000

Equipment 9,500,000
Residual Value 500,000
Depreciable Amount 9,000,000

Rate per unit (9,000,000 / 1,800,000) 5

Depreciation for 2022 (150,000 x 5) 750,000

Retained Earnings 10,000,000
Accumulated Depreciation 15,000,000
Total 25,000,000
Less: Capital liquidated in prior years 5,000,000
Unrealized depletion in ending inventory (20,000 x 30) 600,000 5,600,000
Maximum dividend 19,400,000
 Depreciable Useful life Depreciation Accumulated
Year Amount Depreciation
2019 18,000,000 6 3,000,000 3,000,000
2020 18,000,000 6 3,000,000 6,000,000
2021 18,000,000 6 3,000,000 9,000,000
2022 18,000,000 6 3,000,000 12,000,000