Property, Plant and equipment. Answer with solution

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? 7. In June 2017 Raiza Company acquired a machine in exchange for another machine with a cost of P1,200.000 and an accumulated depreciation of P600,000 and paid a cash difference of P160,000. The market value of the Raiza's machine was P650.000. If the exchange has commercial substance, what would be the cost of the new asset acquired and the amount of gain to be recognized, respectively? 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 115 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