need help with these auditing problems, the first 12 theories, and multiple choice problems.

PROBLEM 1 You were engaged by SGB Corporation to audit their financial statements as of and for the period ended December 31, 2018. The entity incurred all of the following transactions related to Property, Plant and Equipment during the first half of 2018: Transaction Cost Recorded as Purchase price of land 10,540,000 Land Fees for registration and transfer of the title of the land 80,000 Expense Demolition cost of old building 250,000 Expense Special assessment for public roadways and other government projects 100,000 Land Improvements Construction permit fee 75,000 Expense Architect's fees 350,000 Building Excavation costs 500,000 Land Cost of constructing the building 35,000,000 Building Cost of temporary quarters 140,000 Land Improvements Cost of constructing pavements and parking lot 950,000 Land Improvements Cost of constructing a permanent fence after the completion of the construction of the building 480,000 Building Purchase price of machineries and equipment to be used in the normal operations of the entity 2,500,000 Machineries and Equipment Freight charges on the machineries and equipment 150,000 Expense Insurance costs during the delivery of the machineries and equipment 100,000 Expense Discount on early payment for the purchase of machineries and equipment; the discount was not taken 25,000 Installation costs of the machineries and equipment 95,000 Expense Based from your audit procedures, you were able to ascertain the following: The pavements and parking lot are not part of the blueprint of the building. The discount on early payment for the purchase of machineries and equipment was ignored by the entity; the and equipment were e recd rdedthe discount was not taken Installation costs of the machineries and equipment 5 090 Expense Based from your audit procedures , you were able to ascertain the following The pavements and parking lot are not part of the blueprint of the building The discount on early payment for the purchase of machineries and equipm ent was ignored by the entity ; the payable for such purchase , and the machineries and equipment w it were recorded at gross The entity received proceeds totalling to P 45 000 and recorded the amount as income . Further investigation revealed that the proceeds came from the initial testing of the equipmen The entity also temporarily operated the construction site as a parking space during the construction period . Proceeds totalling to $280 060 were received , and the amount was treated by your client as a deduction from the cost of the building The estimated useful life of each of the accounts under PPE are as follows Building 50 years Machineries and equipment - 20 year Land Improvements - 20 year The building's residual val He is P50 0 0Or The entity started using all PPE items on july 1 30 BREAK BABIES MORNING Phone The straight - line method is used and the company based is depreciation expense from the amounts capitalized as stated in the transactions above the totaldep tion expense recorded in 2018 wa OF THAT HAD VOTERS + 75 320 $ 4 42 750 Requirements : What is the correct initial cost of the land 2 . What is the correct initial cost of the building ? 3 . What is the correct initial cost of machin cries and equipment ? 4 . What is the corre at carrying value of Property , Plant and Equipment as of December 31 2018 ? 5 . How much is the overstatement of under statement on the 20 IS net income of the entity ? maddenFor items 26 to 29 ELDER WAND , Inc . has its own research department . However , the company purchases patents from time to time . The following is a summary of transactions involving patents no During 2012 and 2013 , ELDER WAND spent a total of $459 090 w owned by the entity . (Patent A ) on April 1 , 2014 ; additional legal and other costs of P50 , 100 were incurred veloping a new process that was patented A patent (Patent B ) developed by Cin Yus , an inventor , was purchased for $ 187, 500 on December 31 , 2015 , on which date it had an estimated useful life of 12 1 2 years During 2014 , 2015 , and 2016 , research and development activities cost PS10 000 . No additional p atents resulted from these activities A patent infringement suit brought by the company against a competitor be cause of the manufacture of articles infringing on Patent B was successfully prosecuted at a cost of P42 600 . A decision in the case ecase was rendered in June 2016 On July 1 , 2017 , Patent Cwas purchased for P172 800 . This patent had 16 years yet to run During 2018 , ELDER WAND expended P 180 000 on patent development . However , the company is still undecided as to how the patent , it approved by the Bu reall of Patents , will generate probable future economic benefits Assume that the legal life of each patent is also its useful life . 26 . What is Patent A's carrying valu e on December 31 , 2018 ? 20.888 B. 497 , 125 C. 38.125 D. 388 . 113 27 . What is Patent B's carrying value on December 31 , 2018 ? B . 28. 906 C . 32 092 173 342 A 141 250 er 31 28 . What is Patent O's carrying value on December 31 , 2018 8 B. 327 60 C. 159 840 156. 600 1 162.900 2 WORK today 1 90 OR S the total patent amortization expense to be reported in ELDER WAND's income statement for the year ended C. 74 .325 D . 28.300 7.300 B. 28.74 For item 30 The following costs sts were incurred by ESBI Corporation during 2018 57 90The unappropriated retained earnings account would be debited for the following transactions , except A . A two- for- one stock split C. A 70% stock dividend B . A 5 / stock dividend D . An appropriation of retained earnings for planned plant expansi Which of the following statements is true if an entity did not recognize the increase in the fair val we of its investm equity securities accounted at f value through OCT A . Net income is overstated C . Retained earnings at year- end will be overstated B . Net income is understated D . The investment account will be understated 3 . S An analysis of payments made after the reporting date may show that certain liabilities existed but were unred at the end of the reporting period . ST Analytical review procedures are normally employed by the the auditor to obtain assurance of the erall reasonablen of accounts payable . A. Only SI is true B . Only $2 is true C . Both are tru D. Both are false 4 . Income generated from the temporary investment of funds obtained from loans that ar from loans that are used in the construction of qualifying asset Is deducted from the capitalized borrowing costs , if such loan was obtained specifically for the construction of the qualifying asset , and the income is generated during the construction period Is recognized as income in the profi e profit or loss if the loan was obtained specifically for the construction of the qualifying Is recognized as income regardless whether the loan is a general or a specific borrowing Is deducted from the capitalized borrowing costs 5 . Which of the following statement related to goodwill is false ? It is the only unidentifiable intangible asse It may arise from business combination if the acquirer pays a consideration which is higher than the fair value of the acquiree's net asset It may be generated internally It is subsequently measured by checking for possible impairments 6 . S1 An intangible asset with a definite life should be amortized only and should never be tested for impairment $2 An intangible asset with an indefinite life shall be amortized or tested for impairment , whichever is the accounting policy by the entity A True ; Tru B . False : False C . True ; False D. False ; True It is used in evaluation of impairment wherein be derived from the asset it is measured as the present value of future net cash flows expected to recoverable amount B . fair valu C . fair value less cost to sell D. value in use An exclusive right granted by the government to the author , composer or artist , enabling the gray tee to publish , sell orthe buildingIN work with a definite life should be amortized only and I should never be tested for impairment intangible asset with an indefinite life shall be amortized of tested for impairment , whichever is the accounting policy chosen by the entity A . True : Tru B . False : False C. True : False D . False : Tru It is used in evaluation of impairment wherein it is measured as the present value of future net cash flows expected to be derived from the asse recoverable amount B . fair value D . value 8 . An exclusive right granted by the governmen fair value less cost to sell in use otherwise benefit from the literary , musical or artistic work ent to the author , composer or artist , enabling the grantee to publish , sell or 4 . copyrigh B . patent C . goodwill D . trademark 9 . Development costs incurred after technical feasibility shall be recognized a B . expense C. liability adjustment to the RED expenses 10 . Which of the following statements is true ? spenditures extending the life of a property are considered to be revenue expenditures B . ordinary repairs that restores the asset to its previous working condition are considered as capital expenditures C . costs incurred to dismantle an old machinery to give way to the installation of the new machinery is capitalized to the new one , provided that it was not capitalized previously to the old in subsequent costs that in the future service potential of the are capital expenditures 1 1 . Si If an entity obtains a loan to purchase an equipment , the interest paid on the loan shall be a capitalizable borrowing owin cost . 52 It an asset recently revalued have been sold , the whole balance of the revaluation surplus shall be transferred to retained earning A . True ; True B . False alse C . True : False D. False ; Tru 12 . A contingency can be accrued when it is certain that funds are available to settle the disputed amount . B . an asset may have been impaired the amount of the loss can be reasonably estimated and it is probable that an asset has been impaired or a liability incurred it is probable that an asset has been impaired or a liability incurred even though the amount out of the loss cannot b reasonably estimatedA. 36 ,300 B . 28 741 C. 74 . 325 8.300 For item 30 The following costs were incurred by ESBI Corporation during 2018 Searching for applications of new research findings P 57000 Trouble - shooting in connection with breakdowns during commercial 87000 production what Adaptation of an existing capability to a particular requirement or customer's need as part of continuing commercial activity 39.000 Engineering follow through in an early phase of commercial production 45000 Radical modification of the formulation of a glassware produc 78:090 Laboratory research aimed at discovery of new knowledge 204.000 Testing for evaluation of new products 72000 quality control during commercial production , including routine testing of products 74.000 Materials consumed in research and development projects 177000 Consulting fees paid to outsiders for research and development projects 300 000 Personnel costs of persons involved in research and development projects 384.000 Indirect costs reasonably allocable to research and development projects 50:090 Materials purchased for future research and development projects 102000 Research and Development cost Its reimbursable under a contract to perform research and development for Client Corporation 050 090 Design , construction , and testing of preproduction prototypes and models 870.000Routine on going offo fire or otherwise improve upon qualities of existing prod 750.000 Total BASH P4 .539. 000 30 . What is the total amount to be classified and expensed as research and a development for 2018 ? A . P3 . 342090 TEST C. P2 394 090 in B. P2 292000 D. P 2 220.090 MILLION Problems INSTRUCTIONS : Answer the requ lible BL wement it is ) / question (s ) in each of the following problems . By using indelible BLUE - BLACK - INK ballpoint / pen , show your solutions and / or supporti orting computations to the proble is in t the Worksheet and in good account I'm . ENCIRCLE FINAL ANSWERIS ) in your worksheet . No credit shall be given ? if your final answer a agree with your solutions and / or supporting computations or if you hat eno solutions and / or computations at all . Any erasu in the solution should be done properly but use of any kind of correcting fluid paper is not allowed . eris not allowe include also a SUMMARY OF ANSWERS on the first page of your worksheets . Solutions must supp art the answers appearing in the summary to be gi credit . PROBLEM I You were engaged by SGB Corporati orportion to audit their financial statements as of and for the period ended December 3 1 2018 . The entity incurred all of the following transactions related to Property , Plant and Equipment during the first hal half of 2018 Transaction Recorded as Purchase price of land Fees for registration and transfer of the title of the land 10.540 000 Land 80 090 Expense Demoliti of old building Special assessment for public roadways and other government projects 250,000 Expense 100.000 Land improvements Construction 75 000 Expense Architect's fees 350 090 Building