You were assigned to audit the Property, Plant and Equipment of Ryan Corporation in line with the firm's continuing engagement to audit its financial statements as of and for the period ended December 31, 2019. Your prior year working papers included the following - analysis of client's property, plant and equipment: Balance as of Cost Accumulated 12/31/2018 Depreciation Method/ Depreciation Useful life Land 2,100,000 2,785,590 | Double declining Building 8,100,000 balance, 20 years Machinery and 5,400,000 2,160,000 Straight-line, 10 years Equipment Automotive Equipment 4,600,000 3,322,222 |SYD, 8 years a) A four-year old automotive equipment with an original cost of P2,100,000 was traded in for a new automotive equipment having a cash price of P1,600,000 at the beginning of 2019. The company paid additional cash of P850,000. The new automotive equipment was recorded by the company at the cash payment made. b) A machinery which was acquired on January of 2015 was totally destroyed by a fire on June 30, 2019. The machinery was originally acquired at a cost of P1,800,000. c) A replacement machinery was acquired on September 1, 2019 on installment basis. The total installment price is P3,837,054 and is payable five equal annual installments beginning September 1, 2019. The company issued a non-interest bearing note in lieu of the machinery. There is no established price for the machinery. The prevailing market rate of interest for similar securities on the transaction date was. d) Major improvements of the building's electrical wiring system was incurred at the beginning of the year. The total cost amounting to P1,250,000 was recognized as outright repairs and maintenance expense. e) The beginning balance of the automotive equipment would have been depreciated at total of P511,111 for the year.() Salvage value of the assets are considered immaterial. Requirements: 5. What is the gain or loss from the trade in transaction in item a? a. 1,016,667 c. 125,000 b. 266,667 d. 166,667 6. What is the correct depreciation expense on the building for 2019? a. 656,441 c. 698,108 b. 687,691 d. 531,441 7. What is the correct depreciation expense on machinery and equipment for 2019? a. 556,667 c. 546,970 b. 577,902 d. 572,550 8. What is the correct depreciation expense on automotive equipment for 2019? T a. 633,333 c. 575,000 b. 455,555 d. 466,667 PROBLEM C