Al Kawthar Company has oil and gas properties located only in the United States. Data for Al Kawthar Company as of December 31, 2020, are as follows: Cost to be amortized 37,500,000 Production during 2020 Oil 19,000,000 bbl Gas 18,000,000 Mat Proved reserves. 31/12/20 Oil Gas 14,000,000 32,000,000 Mcf bbl Selling price at 31/12/20 Oil Gas 120 bbl 20 Mcf 24 Average selling.price during 2020 Oil 110bbl 12 Mcf Gas Compute the DD&A based on unit-of-revenue for 2020. Show ALL workings.
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- 6. ABC Company has equipment acquired on January 1, 2018, at a cost of P2,200,000 with an estimated residual value of P200,000 and 20 years estimated useful life. On December 31, 2020, the fair value of the equipment is P2,000,000, and revised residual value of P300,000. Round off percentage to whole number and to nearest peso if you are required to gross up. The amount of revaluation surplus to be recognized in the year of revaluation is?Net income for Inkaleb Inc. for 2020 includes the effect of the following transactions involving the sale of fixed assets. Asset Sales Price Cost Gain (Loss)X P20,000 P 80,000 P 10,000Y 25,000 150,000 (18,000)Purchases of fixed assets during 2020 amounted to P340,000. The Accumulated Depreciation account increased P40,000 during 2020. How much is the depreciation expense for 2020?On November 15, 2020, Diamond Company entered into a commitment to purchase 10,000 ounces of gold on February 15, 2021 at a price of P310 per ounce. On December 31, 2020, the market price of gold is P270 per share ounce. On February 15, 2021, the price of gold is P300 per ounce. 1. What is the loss on purchase commitment to be recognized on December 31, 2020? a. 400,000 b. 100,000 c. 300,000 d. 0 2. What is the gain on purchase commitment to be recognized on February 15, 2021? a. 400,000 b. 300,000 c. 100,000 d. 0 3. What amount should be debited to purchases on February 15, 2021? a. 3,000,000 b. 3,100,000 c. 2,700,000 d. 3,500,000 4. What amount should be recognized as accounts payable on February 15, 2021? a. 2,700,000 b. 3,100,000 c. 3,500,000 d. 3,000,000
- 2. ABC Company has equipment acquired on January 1, 2018, at a cost of P2,200,000 with an estimated residual value of P200,000 and 20 years estimated useful life. On December 31, 2020, the fair value of the equipment is P2,000,000, and revised residual value of P300,000. Round off percentage to the whole number and to the nearest peso if you are required to gross up. The carrying value of the equipment on December 31, 2021 is?Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2019, to June 30, 2020 Expenditures on project: 2019: January 1 $ 456,000 May 1 417,000 October 1 648,000 2020: March 1 1,512,000 June 30 708,000 Amounts borrowed and outstanding: $1.7 million borrowed at 10%, specifically for the project $7 million borrowed on July 1, 2018, at 12% $14 million borrowed on January 1, 2017, at 6% Required: Note: Round all final numeric answers to two decimal places. Compute the amount of interest costs capitalized each year. Capitalized interest, 2019 $___________________ Capitalized interest, 2020 $___________________ If it is assumed that the production complex has an estimated life of 20 years and a residual value of $0, compute the straight-line depreciation in 2020. $________________During 2020, Prospect Company incurred P4,000,000 in exploration cost for each of the 15 oil wells drilled in 2020. Of the 15 wells drilled, 10 were dry holes. The entity used the successful effort method of accounting. The entity depleted 30% of the oil discovered in 2020. What amount of exploration cost should be reported in the December 31, 2020 statement of financial position? a.42,000,000b.14,000,000c.20,000,000d.6,000,000
- Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2019, to June 30, 2020 Expenditures on project: 2019: January 1 $ 504,000 May 1 405,000 October 1 504,000 2020: March 1 1,392,000 June 30 540,000 Amounts borrowed and outstanding: $1.6 million borrowed at 10%, specifically for the project $6 million borrowed on July 1, 2018, at 12% $13 million borrowed on January 1, 2017, at 6% Instructions: Note: Round all final numeric answers to two decimal places. Compute the amount of interest costs capitalized each year. Capitalized interest, 2019 $ fill in the blank 1 Capitalized interest, 2020 $ fill in the blank 2 If it is assumed that the production complex has an estimated life of 20 years and a residual value of $0, compute the straight-line depreciation in 2020. $ fill in the blank 3Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2019, to June 30, 2020 Expenditures on project: 2019: January 1 $ 456,000 May 1 489,000 October 1 588,000 2020: March 1 1,572,000 June 30 552,000 Amounts borrowed and outstanding: $1.7 million borrowed at 10%, specifically for the project $6 million borrowed on July 1, 2018, at 12% $10 million borrowed on January 1, 2017, at 6% Required: Note: Round all final numeric answers to two decimal places. Compute the amount of interest costs capitalized each year. Capitalized interest, 2019 $ fill in the blank 1 Capitalized interest, 2020 $ fill in the blank 2 If it is assumed that the production complex has an estimated life of 20 years and a residual value of $0, compute the straight-line depreciation in 2020. $ fill in the blank 3Music Corporation had current assets of P2,000,000 at the end of 2020 and P1,800,000 at the end of 2019. In addition, Music had current liabilities of P1,000,000 in 2020 and P1,500,000 in 2019. Using this information, Music’s net current asset investment for 2020 was P700,000 P(300,000) P300,000 P(700,000)
- The actual carrying of an asset is R650 000 on 1 Jan 2020. Depreciation for the 2020 Financial year amounts to R50 000. The historical carrying amount on 1 January 2020 amounts to R400 000 and the historical depreciation for the 2020 Financial year is R15 000. On 31 December 2020 the asset has a FV of R750 000. What is the amount that will be transferred from the revaluation reserve to retained earning ?Presented below is information related to equipment owned by Swifty Company at December 31, 2020. Cost $ 9,270,000 Accumulated depreciation to date 1,030,000 Expected future net cash flows 7,210,000 Fair value 4,944,000 Assume that Swifty will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 4 years. The fair value of the equipment at December 31, 2021, is $ 5,253,000. Prepare the journal entry (if any) necessary to record this increase in fair value. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)Presented below is information related to equipment owned by Vaughn Company at December 31, 2020. Cost $10,350,000 Accumulated depreciation to date 1,150,000 Expected future net cash flows 8,050,000 Fair value 5,520,000 Assume that Vaughn will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 4 years. The fair value of the equipment at December 31, 2021, is $5,865,000. Prepare the journal entry (if any) necessary to record this increase in fair value. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 enter an account title to record the transaction on December 31, 2018 enter a debit amount enter a credit amount enter an account title to record the transaction on December 31, 2018…