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Ocean Company recently acquired several items of property, plant and equipment. The transactions are as follows: 

1. Purchases a building for P1, 000, 000 in cash and 50, 000 shares of Ocean company with P100 par value which sold for P120 on transaction date. 

2. Received a parcel of land located in Davao City from a philanthropist as an inducement to locate a plant in the city. The land has a fair value of P1, 500, 000. 

3. Acquired a machinery for cash. The machinery was priced at P800, 000 and a 5% cash discount is allowed.

4. Acquired an equipment for P200, 000 by issuing a 60-day, 12% note. 

 

Required: 

Determine the cost of the ff: 

Building_____________________ 

Land______________________ 

Machinery_________________ 

Equipment_____________________

 

B.

Smile company exchanged used equipment for another equipment of Frown Company. The following information pertains to the exchange: 

                                                                          Smile                                         Frown 

Equipment                                                  2, 400, 000                              2, 200, 000 

Accumulated Depreciation                       2, 000, 000                              1, 750, 000 

Fair value of equipment                            500, 000                                   500, 000 

 

Required: Journal entries on the books of smile and frown

 

C.

Amicable Company purchased a machine at a cost of P635, 000 on January 1, 2012. It was estimated that
the machine would have a residual value of P35, 000. The estimated useful life is 5 years, 60, 000
service hours and 150, 000 production units.

Actual operations                                 Service hours                                 Unit produced
         2012                                                    14, 000                                              4, 000
         2013                                                    13, 000                                              32, 000
         2014                                                    10, 000                                              25, 000
         2015                                                     11, 000                                              29, 000
         2016                                                     12, 000                                             30, 000
 

Required:
Please make a depreciation table for the following methods:
a. Sum of years' digits
b. Double declining balance

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