Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Audited balances at Dec 31, 2018: Credit Debit 7,500,000 30,000,000 6,577,500 Land Buildings Accumulated depreciation - Buildings Machinery and equipment Accumulated depreciation - Machinery and

image text in transcribed

Audited balances at Dec 31, 2018: Credit Debit 7,500,000 30,000,000 6,577,500 Land Buildings Accumulated depreciation - Buildings Machinery and equipment Accumulated depreciation - Machinery and equipment Delivery equipment Accumulated depreciation - Delivery equipment 22,500,000 6,250,000 5,750,000 4,230,000 Depreciation data: Buildings Machinery and equipment Delivery equipment Leasehold improvements Depreciation method 150% declining balance Straight-line Sum-of-the-years-digits Straight-line Useful life 25 years 10 years 4 years Transactions during 2019 and other information are as follows: a. On Jan. 2, 2019, Fahd purchased a new truck for P1,000,000 cash and trade-in of a 2-year old truck with a cost of P900,000 and a book value of P270,000. The new truck has a cash price of P1,200,000; the market value of the trade-in is not known. b. On Apr. 1. 2019, a machine purchased for P575,000 on Apr. 1. 2013, was stolen Fahd recovered P387,500 from its insurance company. c. On May 1, 2019, costs of P8,400,000 were incurred to improve leased office premises. The leasehold improvements have a useful life of 8 years. The related lease terminates on Dec. 31, 2025. d. On July 1, 2019, machinery and equipment were purchased at a total invoice cost of P7,000,000; additional costs of P125,000 for freight and P625,000 for installation were incurred. e. Fahd determined that the delivery equipment comprising the P5,750,000 balance at Jan. 1. 2019, would have been depreciated at a total amount of P900,000 for the year ended Dec. 31, 2019. The salvage values of the depreciable assets are immaterial. The policy of the company is to compute depreciation to the nearest month. Compute the following: 1. Depreciation expense for 2019 on buildings 2. Depreciation expense for 2019 on machinery and equipment 3. Depreciation expense for 2019 on delivery equipment 4. Depreciation expense for 2019 on leasehold improvements 5. Accumulated depreciation - buildings, Dec. 31, 2019 6. Accumulated depreciation - machinery and equipment, Dec. 31, 2019 7. Accumulated depreciation - delivery equipment, Dec. 31, 2019 8. Gain or loss on trade in of truck on Jan. 2, 2019

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting Fundamentals Essential Concepts And Examples

Authors: Steven M. Bragg

3rd Edition

0980069998, 978-0980069990

More Books

Students also viewed these Accounting questions

Question

Explain the pattern of trade union membership and union structure

Answered: 1 week ago