1. The Julienne Company imported a new machine at a peso equivalent of P330,000. The company has to pay additional cost of importing the asset such as P10,000 import duties and P15,000 a non-refundable purchase taxes. Cost of transporting the asset was P5,000 and cost of preparing the asset for its intended use include P5,000 installations. How much is the initial cost of the new machine? 2. On April 1, Rey Coorporation 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 Vendor's Original Cost Land P300,000 P280,000 Warehouse 200,000 180,000 Office Building 400,000 340,000 P 900,000 P 800,000 What are the appropriate amounts that Rey should record for the land, warehouse, and office building, respectively? 3. Summer Corporation purchased a new machine on October 31, 2021. A P12,000 down payment was made and three monthly installments of P36,000 each are to be made beginning on November 30, 2021. The cash price would have been P116,000. Summer paid no installations charges under the monthly payment plan but a P2,000 installation charge would have been incurred with a cash purchase. The amount to be capitalized as the cost of the machine on October 31, 2021 would be _______________. 4. Tracey Company purchased a new machinery on January 2, 2021 and incurred the following: Invoice price of machinery P1,500,000; Cash discount taken on the machinery, P75,000; Freight on the new machine, P25,000; Actual cost of removing an old machinery P2,500 but the existing provision is P3,000; Installation cost of new machine, P25,000. Operating cost during first month of regular use, P150,000. What is the cost of the new machinery? 5. On February 2, 2021 Mercy Company purchased a machine from Eldrin Corporation in exchange for a non-interest bearing note requiring eight payments of P80,000. The first payment is to be made on February 2, 2021 and others are due annually on February 2. At date of issuance, the prevailing rate of interesr for this type of note was 11%. Present value (PV) factors are as follows: Period PV of ordinary annuity of 1 at 11% PV of annuity in advance of 1 at 11% 7 4.712 5.231 8 5.146 5.712 What is initial carrying amount of the machine to be reported by youth Company on February 2, 2021? 6. On October 1, 2021, Jessa Corporation purchases and industrial building by an issue of 5,000,000 ordinary shares of P1 par each to the to the vendor. Jessa Corporation's shares have been actively traded on the stock exchange but its quoted price has been erratic, ranging from a low of P3.50 to a high of P13.50 for the year. On the date of purchase of the building, Jessa Corporations's shares are quoted at P8.80. The company paid P220,000 transfer and legal cost in relation to the building. At the time of acquisition the industrial building has a fair value of P35,000,000, on the existing use basis. At what amount should the building be initially recorded? 6. On October 1, 2021, Jessa Corporation purchases and industrial building by an issue of 5,000,000 ordinary shares of P1 par each to the to the vendor. Jessa Corporation's shares have been actively traded on the stock exchange but its quoted price has been erratic, ranging from a low of P3.50 to a high of P13.50 for the year. On the date of purchase of the building, Jessa Corporations's shares are quoted at P8.80. The company paid P220,000 transfer and legal cost in relation to the building. At the time of acquisition the industrial building has a fair value of P35,000,000, on the existing use basis. At what amount should the building be initially recorded? 8. Gabby Inc. and Dana Company have an exchange with no commercial substance. The asset given up by Gabby has a book value of P120,000 and a fair value of P135,000. The asset given up by Dana has a book value of P220,000 and a fair value of P200,000. Boot of P65,000 is received by Dana. Question 1: What amount should Gabby record for the asset received? Question 2: The journal entry made by Dana to record the exchange will include 9. December 31, 2021. Troy Company purchased a P4.000.000 tract of land for a factory site. Troy razed an old building on the property and sold the materials it salvaged from the demolition. Troy incurred additional costs and realized salvaged proceeds during December 2021 as follows: Payments to tenants to vacate the premises. P200,000; Demolition of old building, P100,000; Legal fees for purchase contract and recording ownership. P50,000; Title guarantee insurance, P30,000; Proceeds from sale of salvaged materials, P10,000. In its December 31, 2021 balance sheet, Troy should report a balance in the land account of 10. On February 1, 2021. Jery Company borrowed P1,000,000 which bears 12% specifically to finance the construction of its qualifying asset. Construction of the building started on September 1, 2021 and continues without interruption until the year end of December 31, 2021. During the period of construction the entity incurs directly attributable costs of P100,000 in September and P250,000 in each month from October to December (for simplicity it is assumed that these costs are incurred on the first day of the month). Each month the borrowings, less any amount that is to be expended for the building works in that month are re-invested and earn interest at a rate of 5% per annum. During the year ended December 31, 2021, the enity incurs interest on the P1,000,000 loan totaling P110,000 and earns interest on the re-invested portion of the loan of P37,917. What amount of borrowing costs should Jery capitalized