Deloy, Jenivieve O.
BSA501
07 TASK PERFORMANCE 1
CASE 1
1. What is the revaluation surplus balance at December 31, 201C, before recognition of the
impairment loss?
Cost of machinery P 100,000
Less: AD, Dec. 31
(100,000/10) (10,000)
Carrying value 90,000
Fair value 112,500
Revaluation surplus 22,500
Less: Realization through depreciation
(22,500/9x2) (5,000)
Balance before recognition of impairment loss P 17,500
2. What is the amount of impairment loss to be reported on Love’s income statement for the year
201C?
Fair value, Dec. 31 P 112,500
Less: Depreciation (22,500/9x2) 25,000
Carrying value 87,500
Less: Recoverable value 68,000
Decrease in value 19,500
Less: Revaluation surplus 17,500
Impairment loss P 2,000
CASE 2
3. Depreciation expense for 201F on Buildings
Book value, Jan. 1, 201F (30,000,000 -
6,577,500) P 23,422,500
150% declining balance rate (1/25 x
150%) 6%
Depreciation expense for 201F P 1,405,350
4. Depreciation expense for 201F on Machinery and equipment
Machinery and equipment, Jan. 1 P 225,500,000
Less: Machine stolen 575,000
Balance 224,925,000
Depreciation rate 10% 22,492,500
Machine stolen.
(575,000 x 10% x 3/12) 14,375
Machine purchased July 1,
(7,750,000 x 10% x 6/12) 387,500
Depreciation for 201F P 22,894,375
5. Depreciation expense for 201F on Delivery equipment
Depreciation on Jan.1 201F P 900,000
Less: Depreciation on truck (900,000 x 2/10) 180,000 P 720,000
Depreciation on truck purchased
(1,200,000 x 4/10) 480,000
Depreciation for 201F P 1,200,000
6. Depreciation expense for 201F on Leasehold improvements
Cost of leasehold improvements P 8,400,000
Depreciation period, May 201F- Dec 201L 80 months
Depreciation per month 105,000
May 201F – Dec 201F 8 months
Depreciation expense for 201F 840,000
7. Accumulated depreciation – Buildings December 31, 201F
Balance, Jan. 201F P 6,577,500
Add: Depreciation for 201F 1,405,350
Accumulated depreciation for 201F P 7,982,850
8. Accumulated depreciation – Machinery and equipment, December 31, 201F
Balance, Jan. 201F P 6,250,000
Depreciation for 201F 22,894,375
Machine stolen.
(575,000 / 10 x 5) (287,500)
Accumulated depreciation for 201F P 28,856,875
9. Accumulated depreciation – Delivery equipment December 31, 201F
Balance, Jan. 201F P 4,230,000
Depreciation for 201F 1,200,000
Truck traded (900,000 – 270,000) 630,000
Accumulated depreciation for 201F P 4,800,000
10. Gain (loss) on trade in of truck on January 2, 201F
Trade in value (1,200,000 – 1,000,000) P 200,000
Book value 270,000
Loss in trade-in (70,000)
CASE 3
11. Machine 3, purchased on January 3, 201E, should be recorded at
Cash price P 171,000
Freight charges 1,320
Installation cost 5,280
Total cost machine 3 P 177,600
12. The second-hand vehicle purchased on June 22, 201E should be recorded at
Cash Price P 45,600
Repainting charges 1,965
New tires 1,035
Total cost of secondhand vehicle acquired P 48,600
13. The office furniture acquired on August 14, 201E should be recorded at
Fair value of machine given up P 34,500
14. The gain (loss) to be recognized on the exchange of machine 1 for officer furniture on
August 14, 201E should be:
Cost of machine 1 P 129,000
Accumulated depr. Oct 7, 201A-Aug 14 201E 95,175
CV 33,825
FV 34,500
Gain on exchange P 675
15. The total depreciation expense for 201E is:
Buildings
(557,160-15,000) /20 years P 27,108.00
Machinery:
1 (129,000-7,500)/5x8/12 16,200.00
2 (144,000-9,000)/6 22,500.00
3 (177,600-12,000)/5 33,120.00 71,820.00
Vehicles:
Old (140,400-58,968)40% 32,572.80
New (48,600x40%x6/12) 9,720.00 42,292.80
Office furniture
(34,500-1,620) /8x4/12 1,370.00
Total P142,590.80
16. The gain or loss to be recognized on the sale of the vehicle on May 25, 201F is
Proceeds from sale P19,800.00
Carrying value, Jan 1
(81,432-32,573.10) x 1/2 24,429.60
Depreciation, Jan 1-May 25
(24,430x40% x 5/12) (4,071.67) 20,3257.93
Loss on sale (557.93)
17. The total depreciation expense for 201F is
Buildings 27,108
Machinery:
2 22,500
3 33,120 55,620
Vehicles:
Old- sold on May 4,071.67
Old- still on hand on Dec.31
(24,430 x 40%) 9,772
New- (48,600-9,720) x40% 15,552 29,395.67
Office Furniture (32,880/8) 4,110
Land improvement 900
Total 117,133.67
18. After the overhaul, machine 2’s revised annual depreciation is
Total cost of machine 2
(144,000+36,000 overhaul) 180,000
Accumulated depreciation 110,625
CV 69,375
Revised RV (15,000)
Remaining depreciable cost 54,375
Divided by Revise remaining life 25
Multiplied by Months 12
Revised annual depreciation 26,100
19. What is the cost of the new vehicle acquired on June 20, 201G
Cash paid 69,900
Trade in value of old vehicle 11,100
Total cost of new vehicle 81,000
20. The total depreciation expense for 201G is
Buildings 27,108
Machinery:
2 26,100
3 33,120 59,220
Vehicles:
Old- traded in (June 20)
(24,490-9772) x40% x 6/12 2,932
Acquired on June 20 through trade in
(81,000 x 40% x 6/12) 16,200
Acquired on June 22, scrapped
(38,880-15,552) x 40% x 9/12 6,998 26,130
Office Furniture 4,110
Land improvement (18,000/10) 1,800
Total 118,368
The
total
depreci
ation
expens
e for
201G is
