Property, Plant, Equipment

SOLUTION:

Problem 1:

Cash Price 230,000

Freight 20,000
Installment       50,000
Cost 300,000

Down Payment 100,000

Present Value (100,000 x 2.40183) 240,183 340,183
Total 640,183

Answer: D

Problem 2:

Gain or loss = Fair Value – Book Value

PBA NBA
8,000,000 12,000,000
-5,000,000 -10,000,000
3,000,000 2,000,000

Answer: B
Problem 3:

Land
a P20,000,000 x P30,000,000 / P40,000,000 15,000,000
b 2,500,000
c -  
Total Cost 17,500,000

Building
a P20,000,000 x P10,000,000 / P40,000,000 5,000,000
b -
c 5,000,000 x 90% 4,500,000
Total Cost 9,500,000

Answer: C

Problem 4:

PBA NBA
8,000,000 12,000,000
1,000,000 -1,000,000
9,000,000 11,000,000

Answer: A
Problem 5:

At carrying amount
PBA NBA
5,000,000 10,000,000
1,000,000 -1,000,000
6,000,000 9,000,000

Answer: B

Problem 6:

List Price 1,000,000

Trade Disc -200,000
Rebates -100,000
Purchase Disc -50,000
Import Duties 150,000
Installation 80,000
Prof fees 30,000
Insurance in
transit 40,000
Consultant fee 20,000
Freight 60,000
Safety rail 80,000
Supplies used in testing 70,000
Platform 400,000
 Cooler 500,000
Dismantling (obligation)     50,000
Total Cost 2,130,000

Answer: B