applied auditing problem
8 How much is the Accumulated depreciation - Delivery Equipment as of December 31, 2019? A P5,430,000 B P4,800,000 C P4,980,000 D P5,610,000 9 How much is the Accumulated depreciation - Leasehold Improvements as of December 31, 2019? A P840,000 B P700,000 C P1,050,000 D P1,260,000 10 How much is the net gain (loss) from disposal of assets for the year ended December 31, 2019? A P130,000 B (P 70,000) C P200,000 D (P 130,000)5:29 P y V Q at all 45% PROBLEM NO. 2 You obtain the following information pertaining to Terizla Co.'s property, plant, and equipment for 2019 in connection with your audit of the company's financial statements. Audited balances at December 31, 2018: DEBIT CREDIT Land P 7,500,000.00 Buildings 60,000,000.00 Accumulated Depreciation - Buildings P 13,155,000.00 Machinery and Equipment 45,000,000.00 Accumulated Depreciation - Machinery and Equipment 9,375,000.00 Delivery Equipment 5,750,000.00 Accumulated Depreciation - Delivery Equipment 4,230,000.00 Depreciation data: DEPRECIATION METHOD USEFUL LIFE Buildings 150% declining balance 25 years Machinery and Equipment straight-line 10 years Delivery Equipment SYD 4 years Leasehold Improvements straight-line Transactions during 2019 and other information are as follows: a On January 2, 2019, Red purchased a new truck for P 1,000,000 cash and traded-in a 2-year- old truck with a cost of P 900,000 and a book value of P 270,000. The new truck has a cash price of P 1,200,000; the market value of the old truck is not known. b On April 1, 2019 a machine purchased for P 1,150,000 on April 1, 2014 was destroyed by fire. Red recovered P 775,000 from its insurance company. c On May 1, 2019, cost of P 8,400,000 were incurred to improve leased office premises. The leasehold improvements have a useful life of 8 years. The related lease terminates on December 31, 2025. d On July 1, 2019, machinery and equipment were purchased at a total invoice cost of P 14,000,000; additional cost of P 250,000 for freight and P 1,250,000 for installation were incurred. e Red determined that the delivery equipment comprising the P 5,750,000 balance at January 1, 2019, would have been depreciated at a total amount of P 900,000 for the year ended December 31, 2019. The salvage values of the depreciable assets are immaterial. The policy of the Red Co. is to compute depreciation to the nearest month. Based on the above and the result of your audit, answer the following: 6 How much is the Accumulated depreciation - Buildings as of December 31, 2019? A P15,555,000 B P14,207,400 C P16,755,000 D P15,965,700 7 How much is the Accumulated depreciation - Machinery and Equipment as of December 31, 2019? A P17,688,750 B P17,660,000 C P17,113,750 D P17,228,750 8 How much is the Accumulated depreciation - Delivery Equipment as of December 31, 2019? A P5,430,000 B P4,800,000 O
