aDetermine cost of plant acquisitions.E9.1 (LO 1), C Writing The following expenditures relating to plant assets were made by Glenn Company during the first 2 months of 2022.1. Paid $7,000 of accrued taxes at the time the plant site was acquired.2. Paid $200 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit.3. Paid $850 sales taxes on a new delivery truck.4. Paid $21,000 for parking lots and driveways on the new plant site.5. Paid $250 to have the company name and slogan painted on the new delivery truck.6. Paid $8,000 for installation of new factory machinery.7. Paid $900 for a 2-year accident insurance policy on the new delivery truck.8. Paid $75 motor vehicle license fee on the new truck.Instructionsa. Explain the application of the historical cost principle in determining the acquisition cost of plant assets.b. List the numbers of the transactions, and opposite each indicate the account title to which each expenditure should be debited.Determine property, plant, and equipment costs.Eo a (TCma mpany incurred the following costs.

Introduction:- Property, plant ,equipment classified as fixed assets. It is reported under balance…

Answered: 8. Paid $75 motor vehicle license fee…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following costs were incurred by HEHE, Inc.. during 2020: July 1 Organization fees P120,000 July 2 Land site and old building 1,890,000 July 3 Option payments 250,000 July 20 Broker’s fees on property acquired 110,400 July 30 Cost of remodeling the building 60,000 August 30 Salaries of executives 360,000 December 21 Real property taxes 240,000 Additional information: The building acquired had a fair value of P450,000 while the land was currently appraised at P1,800,000 P50,000 of the option money paid were for properties not acquired. The executives had no participation on the remodeling of the building The property taxes were for the 2020 calendar year. How much is the cost of land?
At December 31, 2027, Flint Corporation reported the following plant assets. Land $4,068,000 Buildings $26,700,000 Less: Accumulated depreciation-buildings 16,170,300 10,529,700 Equipment 54,240,000 Less: Accumulated depreciation-equipment 6,780,000 47,460,000 Total plant assets $62,057,700 During 2028, the following selected cash transactions occurred. Apr. 1 Purchased land for $2,983,200. May 1 Sold equipment that cost $813,600 when purchased on January 1, 2021. The equipment was so June 1 Sold land for $2,169,600. The land cost $1,356,000. July 1 Purchased equipment for $1,491,600. Dec. 31 Retired equipment that cost $949,200 when purchased on December 31, 2018. No salvage val (a) Prepare a tabular summary that includes the plant asset accounts and balances shown on the December 31, 2 · Decreases in assets, liabilities, or stockholders' equity require a negative sign or parentheses. -Increases in expenses and losses require a negative sign or parentheses. Increases in Accumulated…
The following costs were incurred by ABCDEFGH, Inc.. during 2020: July 1 Organization fees P120,000 July 2 Land site and old building 1,890,000 July 3 Option payments 250,000 July 20 Broker’s fees on property acquired 110,400 July 30Cost of remodeling the building 60,000 August 30 Salaries of executives 360,000 December 21 Real property taxes 240,000 Additional information: The building acquired had a fair value of P450,000 while the land was currently appraised at P1,800,000 P50,000 of the option money paid were for properties not acquired. The executives had no participation on the remodeling of the building The property taxes were for the 2020 calendar year. How much is the cost of land? a. 1,856,320 b. 2,288,000 c. 1,992,320 d. 1,512,000
At December 31, 2022, Culver Corporation reported the following plant assets. Land Buildings Less: Accumulated depreciation-buildings June Equipment Less: Accumulated depreciation-equipment During 2023, the following selected cash transactions occurred. (a) Total plant assets Apr. 1 Purchased land for $2,785,200. May 1 1 1 Sold equipment that cost $759,600 when purchased on January 1, 2016. The equipment was sold for $215,220. Sold land for $2.025,600. The land cost $1,266,000. July Purchased equipment for $1,392,600. Dec. 31 Retired equipment that cost $886,200 when purchased on December 31, 2013. No salvage value was received. Bal. $ $26,690,000 Cash 15,097,050 Land 50,640,000 6,330,000 $3,798,000 Prepare a tabular summary that includes the plant asset accounts and balances shown on the December 31, 2022, balance sheet. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the…
Biliran Company incurred the following costs at the beginning of the current year: Cost of land 1,000,000 Cost of building Remodelling and repairs prior to occupancy 4,000,000 500,000 Escrow fee 100,000 Clearing, levelling and landfill Property tax for period prior to acquisition Real estate commission 250,000 150,000 300,000 What is the cost of building? a. 4,500,000 b. 4,740,000 C. 4,800,000 d. 4,940,000
27. Expenditures after Acquisition The following expenditures were incurred during the year: Required: 1. Classify the expenditures as either capital or revenue expenditures. a. Paid $4,000 for an overhaul of an automobile engine b. Paid $20,000 to add capacity to a cellular phone company's wireless network c. Paid $200 for routine maintenance of a manufacturing machine d. Paid $10,000 to remodel an office building e. Paid $300 for ordinary repairs
Indicate to which account Adama would debit each of the costs. Determine acquisition costs of land. E9.3 (LO 1), AP On March 1, 2022, Boyd Company acquired real estate, on which it planned to construct a small office building, by paying $80,000 in cash. An old warehouse on the proper was demolished at a cost of $8,200; the salvaged materials were sold for $1,700. Additional expenditures before construction began included $1,900 attorney's fee for work concerning the lar purchase, $5,200 real estate broker's fee, $9,100 architect's fee, and $14,000 to put in driveways and a parking lot. Instructions a. Determine the amount to be recorded as the cost of the land. b. For each cost not used in part (a), indicate the account to be debited. Understand depreciation concepts. ha Monot has prepared the following list of statements about depreciation.
ROSE Company purchased machinery on January 1, 2020. It has an estimated useful life of four years and a residual value of ₱500,000. The machine is being depreciated using SYD Method. The depreciation applicable to this fixed asset for 2021 is ₱1,200,000. What was the acquisition cost of the machinery? a. ₱ 4,500,000 b. ₱ 3,000,000 c. ₱ 3,500,000 d. ₱ 4,000,000
ROSE Company purchased machinery on January 1, 2020. It has an estimated useful life of four years and a residual value of ₱500,000. The machine is being depreciated using SYD Method. The depreciation applicable to this fixed asset for 2021 is ₱1,200,000. 1. What was the acquisition cost of the machinery? a. ₱ 3,000,000 b. ₱ 4,500,000 c. ₱ 4,000,000 d. ₱ 3,500,000 2. What was the carrying value of the machinery on December 31, 2021? a. ₱ 1,700,000 b. ₱ 1,800,000 c. ₱ 3,300,000 d. ₱ 2,800,000
Problem 27-10. (AICPA Adapted) e. On January 1, 2020, Domino Company purchased a new machine for P4,000,000. The new machine has an estimated useful life of eight years and the residual value was estimated to be P400,000. Depreciation was computed on the sum of the years' digits method. What is the carrying amount of the machine on December 31, 2021? а. 2,100,000 b. 2,500,000 с. 1,150,000 d. 3,300,000 CS Scanned with CamScanner
ROSE Company purchased machinery on January 1, 2020. It has an estimated useful life of four years and a residual value of ₱500,000. The machine is being depreciated using SYD Method. The depreciation applicable to this fixed asset for 2021 is ₱1,200,000. 1. What was the acquisition cost of the machinery? a. ₱ 3,000,000 b. ₱ 4,500,000 c. ₱ 4,000,000 d. ₱ 3,500,000 2. What was the carrying value of the machinery on December 31, 2021? a. ₱ 1,700,000 b. ₱ 1,800,000 c. ₱ 3,300,000 d. ₱ 2,800,000 Question ROSE Company purchased machinery on January 1, 2020. It has an estimated useful life of four years and a residual value of ₱500,000. The machine is being depreciated using SYD Method. The depreciation applicable to this fixed asset for 2021 is ₱1,200,000. 1. What was the acquisition cost of the machinery? a. ₱ 3,000,000 b. ₱ 4,500,000 c. ₱ 4,000,000 d. ₱ 3,500,000 2. What was the carrying value of the machinery on December 31, 2021? a. ₱ 1,700,000 b. ₱ 1,800,000 c. ₱ 3,300,000 d. ₱…
Borrowing cost (IAS-23) If the acquisition/construction of asset is financed through borrowings then any interest paid on such debt would be capitalized in the value of asset. Test your understanding.3 Acquisition Costs of Realty: Pollachek Co. purchased land as a factory site for $450,000. Process of tearing down two old buildings on the site and constructing the factory required 6 months, The company paid $42,000 to raze the old buildings and sold salvaged lumber and brick for $6,300. Legal fees of $1,850 were paid for title investigation and drawing the purchase contract. Pollachek paid $2,200 to an engineering firm for a land survey, and $65,000 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $1,500, and a liability insurance premium paid during construction was $900. The contractor's charge for construction was $2,740,000. The company paid the contractor in two installments: $1,200,000 at…

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