QUESTIONS 1. Define property, 2. What are ¢] plent and Plant and equipment. he major characteristics in defining property, ‘equipment? . Give examples of Property, plant and equipment. Explain the recognition of property, plant and equipment. 5. Explain the ¢ ; reatment of spare parts and servicing equipment. . Explain the measurement of e property, plant and equipment at recognition and after recognition. What are the elements of cost of property, plant and equipment? 8. Give examples of directly attributable costs. o Give examples of costs which are expensed rather than capitalized as property, plant and equipment. 10. What does the cost of the asset acquired on a cash basis include? 11. What is the cost of an asset acquired on account subject to a cash discount? 12, If an asset is acquired on the installment basis, the asset is recorded at what amount? 13, Discuss the accounting procedure when an asset is acquired through the issuance of share capital 14, Discuss the accounting procdure when an asset is acquired by issuing bonds payable. 15. Discuss the accounting procedure for the recording of an exchange. 647Problem 1:0n January 1, 2022, Hydrogen-H Company purchased several Machineries that will be Used in the production of goods at @ purchase price of P1,000,000. Hydrogen-H Company paid import duties of P10,000 and non-refundable purchase taxes of P5,000. Hydrogen-H Company also incurred £230,000 installation and assembly cost. Hydrogen-H Company expects that it wil incur dismantling Cost émounting to P132,275 at the end of its S-year useful Ife. The prevailing market interest rate during the transaction date was 12%. ‘The present value factor of P1 at 12% for 5 periods is at 0.567 ‘The present value factor of ordinary annuity at 12% for 5 periods is at 3.6048 1. How much should the Machineries be initially recognized? a. 1,045,000 b. 1,177,275 c. 1,120,000 d. 1,521,825 Problem 2: On March 1, 2022, Helium-He Company purchased an equipment from a local dealer under the terms 3/15, n/30 for P3,000,000. Helium-He Company paid installation costs of P14,000. In addition, Helium-He Company paid advertising and promotion amounting to P 20,000 and incurred initial operating losses of P 12,000. Helium-He Company settled the account on March 16, 2022. 2. How much is the cost of Equipment to be recorded on the date of acquisition? ‘a. 2,924,000 b. 3,015,000 c. 2,925,000 4. 3,014,000