1. Stevenson Company purchased a depreciable asset for P250,000 on April 1, 2018. The estimated residual value is P25,000, and the estimated useful life is 5 years. The straight-line method is used for depreciation. What is the balance in accumulated depreciation on May 1, 2021 when the asset is sold?

P138,750

P90,000

P123,750

P105,000

2. Radiant Co. incurred the following costs during 2021:

Significant modification to the formulation of a chemical product P160,000

Trouble-shooting in connection with breakdowns during commercial

production 150,000

Cost of exploration of new formulas 200,000

Seasonal or other periodic design changes to existing products 185,000

Laboratory research aimed at discovery of new technology 275,000

In its income statement for the year ended December 31, 2021, Radiant should report research and development expense of?

P635,000

P820,000

P970,000

P785,000

3. A machine cost P120,000, has annual depreciation of P20,000, and has accumulated depreciation of P90,000 on December 31, 2020. On April 1, 2021, when the machine has a fair value of P27,500, it is exchanged for a machine with a fair value of P135,000 and the proper amount of cash is paid. The exchange has commercial substance.

The gain to be recorded on the exchange is?

P15,000

P2,500

P0

P5,000

4. On April 1, Mooney Corporation purchased for P855,000 a tract of land on which was located a warehouse and office building. The following data were collected concerning the property:

Current Assessed Valuation Vendors Original Cost

Land P300,000 P280,000

Warehouse 200,000 180,000

Office building 400,000 340,000

P900,000 P800,000

What are the appropriate amounts that Mooney should record for the land, warehouse, and office building, respectively?

Land, P299,250; warehouse, P192,375; office building, P363,375.

Land, P300,000; warehouse, P200,000; office building, P400,000.

Land, P280,000; warehouse, P180,000; office building, P340,000.

Land, P285,000; warehouse, P190,000; office building, P380,000.