1. At the start of the year, the opening balances of Land and Building of Loyal Company were P4,400,000 and P13,000,000 respectively. The following transactions transpired during the current year: a. A plot of land was purchased for P3,200,000. An amount of P350,000 was paid to a real estate agency to acquire the land and P60,000 was spent to clear the area. Timber and gravel were sold for P50,000 during the cleaning of the site.

b. For P9,000,000, a second plot of land with building was purchased. The appraiser placed a P4,000,000 value on the land and a P2,000,000 value on the building. The structure was dismantled for P240,000 shortly after the purchase. A new building was built for P11,000,000, plus a P110,000 excavation fee, a P140,000 architect charge, and a P120,000 building permit. c. A third parcel of property was purchased for P4,000,000 and is being retained for future usage, although the plan is not clear. Required: (1) Total cost of land; (2) Cost of new building

2. The following data pertain to Vitali's PPE for 2021. Reviewed balances at December 31, 2020 revealed the following:

Debit Credit

Land 7,500,000.00

Buildings 30,000,000.00

Accumulated depreciation- Buildings 6,577,500.00

Machinery and equipment (M&E) 22,500,000.00

Accumulated depreciation- M&E 6,250,000.00

Delivery vehicle (DV) 5,750,000.00

Accumulated depreciation- DV 4,230,000.00 Depreciation data

Depreciation method Useful life

Buildings 150% declining balance 25 years

M&E Straight-line 10 years

DV Sum-of-the-years' digits 4 years

Leasehold improvements Straight-line Transactions for 2021 and other information are as follows:

a. On January 2, 2021, Vitali paid P1,000,000 for a new truck and traded in a 2-year-old truck that cost P900,000 and has a book value of P270,000. The new truck costs P1,200,000 in cash. b. A machine purchased for P575,000 on April 1, 2015 was stolen on April 1, 2021. Vitali was able to recoup P387,500 from the insurance provider. c. On May 1, 2021, a total of P6,000,000 was spent to upgrade rented office space. The leasehold improvements have an 8-year useful life. The linked lease will expire on December 31, 2027. d. On July 1, 2021, machinery and equipment were purchased for a total invoice cost of P7,000,000 , including freight and installation fees of P125,000 and P625,000, respectively. e. Vitali calculated that the delivery vehicle, which accounted for the P5,750,000 balance on January 1, 2021, would have been depreciated at a total of P900,000 for the fiscal year ending December 31, 2021.

Notes: The salvage values of the depreciable assets are immaterial. The policy of the company is to compute depreciation to the nearest month.

Required:

(1)Depreciation expense for 2021 on Buildings (2)Depreciation expense for 2021 on Machinery and Equipment (3)Depreciation expense for 2021 on Delivery Vehicles (4)Depreciation expense for 2021 on Leasehold Improvements (5)Accumulated Depreciation on Buildings as of December 31, 2021 (6)Accumulated Depreciation on Machinery and Equipment as of December 31, 2021 (7)Carrying Value of Delivery Vehicles as of December 31, 2021 (8)Gain or loss on trade in of truck on January 2, 2021