PROPERTY, PLANT AND EQUIPMENT

PROBLEM

You were hired by Charie Company during 2019 as their new Accountant. The following were discovered by you at the end of the year 2019.

1.On December 24, 2019, Charie purchased office equipment for 400,000, terms 2/10, n/15. No entry was made on the date of purchase. The same was paid on December 31, 2019 and the former accountant debited Office Equipment and credited Cash for 392,000.

2.Machine C, with a cash price of 128,000, was purchased on January 2, 2019. The company paid 20,000 down and 10,000 for 12 months. The last payment was made on December 30, 2019. Straight line depreciation based on a 5-year useful life and no salvage value was recorded at 28,000 for the year. Freight of 4,000 on Machine C was debited to the Freight in account

3.Machine P with a cash selling prices of 360,000 was acquired on April 1, 2019 in exchange for 400,000 face amount of bonds payable selling at 94, and maturing on April 1, 2029. The accountant recorded acquisition by a debit to Machinery and a credit to Bonds Payable for 400,000. Straight line Depreciation was recorded based on a 5-year economic life and amounted to 54,000 for nine months. In the computation of depreciation, residual value of 40,000 was used.

4.Machine A was acquired on January 22, 2019, in exchange for past due accounts receivable of 140,000 on which allowance of 20% was established at the end of 2018. The current fair value of the machine on January 22 was estimated at 110,000. The machine was recorded by a debit to Machinery and a credit to Accounts Receivable for 140,000. No depreciation was recorded on Machine A because it was not installed and never used in operations. On February 2, 2019, Machine A was exchanged for 1,000 shares of the company's outstanding share capital with market price of 105 per share. The Treasury stock account was debited for 140,000 with a corresponding credit to Machinery.

5.On December 29, 2019, the company exchanged 10,000 shares of Lulu, Inc. common stock, which Charie was holding as an investment, for an equipment from Faye Corporation. The common stock of Lulu, Inc., which had been purchased by Charie for 45 per share, had a quoted market value of 50 per share on the date of exchange the equipment had a market value of 470,000. The transaction was recorded by a debit to Equipment and a credit to Investment in Lulu, Inc. for 450,000

REQUIRED: Compute the initial carrying amount of the PPE for each item, i.e., 1 to 5.