Homework Help is Here – Start Your Trial Now!
Business
Accounting
Loki Company commenced operations on January 1, 2015. During the following year, the company acquired a tract of land, demolished the building on the land and built a new factory. Equipment was acquired for the factory and, in September 2016, the plant was ready to commence operation. A gala opening was held on September 18, with the City Mayor opening the factory. The first items were ready for sale on September 25. During this period, the following cash inflows and outflows occurred: • While searching for a suitable block of land, Seri placed an option to buy with three real estate agents at a cost of P1,000 each. Payment of option fees • Receipt of loan from bank • Payment to settlement agent for title search, stamp duties, and settlement fees • Payment of delinquent property taxes assumed by Seri Company Payment for land Payment for demolition of old building Proceeds from sale of material from old building Payment to architect Payment to City Hall for approval of building construction • Payment for safety fence around construction site Payment to construction contractor for factory building Payment for external driveways, parking bays, and safety lighting Payment of interest on construction loan • Payment for safety inspection on building • Payment for equipment • Payment for freight and insurance costs on delivery of equipment Payment of installation cost on equipment Payment for safety equipment surrounding equipment Payment for removal of safety fence Payment for new fence surrounding the factory Payment for advertisements in the newspaper about the forthcoming factory and its benefits to the community Payment for opening ceremony • Payments to adjust equipment to more efficient operating levels subsequent to initial operation P 3,000 3,000,000 100,000 50,000 1,000,000 120,000 55,000 230,000 120,000 34,000 2,400,000 540,000 400,000 30,000 640,000 56,000 120,000 110,000 20,000 80,000 5,000 60,000 33,000

Loki Company commenced operations on January 1, 2015. During the following year, the company acquired a tract of land, demolished the building on the land and built a new factory. Equipment was acquired for the factory and, in September 2016, the plant was ready to commence operation. A gala opening was held on September 18, with the City Mayor opening the factory. The first items were ready for sale on September 25. During this period, the following cash inflows and outflows occurred: • While searching for a suitable block of land, Seri placed an option to buy with three real estate agents at a cost of P1,000 each. Payment of option fees • Receipt of loan from bank • Payment to settlement agent for title search, stamp duties, and settlement fees • Payment of delinquent property taxes assumed by Seri Company Payment for land Payment for demolition of old building Proceeds from sale of material from old building Payment to architect Payment to City Hall for approval of building construction • Payment for safety fence around construction site Payment to construction contractor for factory building Payment for external driveways, parking bays, and safety lighting Payment of interest on construction loan • Payment for safety inspection on building • Payment for equipment • Payment for freight and insurance costs on delivery of equipment Payment of installation cost on equipment Payment for safety equipment surrounding equipment Payment for removal of safety fence Payment for new fence surrounding the factory Payment for advertisements in the newspaper about the forthcoming factory and its benefits to the community Payment for opening ceremony • Payments to adjust equipment to more efficient operating levels subsequent to initial operation P 3,000 3,000,000 100,000 50,000 1,000,000 120,000 55,000 230,000 120,000 34,000 2,400,000 540,000 400,000 30,000 640,000 56,000 120,000 110,000 20,000 80,000 5,000 60,000 33,000

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 5PB: Johnson, Incorporated, had the following transactions during the year: Purchased a building for...
See similar textbooks
icon
Related questions
Question
The amount to be reported as expenses (excluding depreciation) in Seri’s income statement is
 
 
 
A. P60,000
B. P100,000
C. P65,000
D. P67,000
Loki Company commenced operations on January 1, 2015. During the following year, the company acquired a tract of land, demolished the building on the land and built a new factory. Equipment was acquired for the factory and, in September 2016, the plant was ready to commence operation. A gala opening was held on September 18, with the City Mayor opening the factory. The first items were ready for sale on September 25. During this period, the following cash inflows and outflows occurred: While searching for a suitable block of land, Seri placed an option to buy with three real estate agents at a cost of P1,000 each. Payment of option fees • Receipt of loan from bank • Payment to settlement agent for title search, stamp duties, and settlement fees • Payment of delinquent property taxes assumed by Seri Company • Payment for land Payment for demolition of old building • Proceeds from sale of material from old building • Payment to architect • Payment to City Hall for approval of building construction • Payment for safety fence around construction site • Payment to construction contractor for factory building • Payment for external driveways, parking bays, and safety lighting • Payment of interest on construction loan • Payment for safety inspection on building • Payment for equipment Payment for freight and insurance costs on delivery of equipment • Payment of installation cost on equipment • Payment for safety equipment surrounding equipment • Payment for removal of safety fence • Payment for new fence surrounding the factory • Payment for advertisements in the newspaper about the forthcoming factory and its benefits to the community • Payment for opening ceremony Payments to adjust equipment to more efficient operating levels subsequent to initial operation P 3,000 3,000,000 100,000 50,000 1,000,000 120,000 55,000 230,000 120,000 34,000 2,400,000 540,000 400,000 30,000 640,000 56,000 120,000 110,000 20,000 80,000 5,000 60,000 33,000
Transcribed Image Text:Loki Company commenced operations on January 1, 2015. During the following year, the company acquired a tract of land, demolished the building on the land and built a new factory. Equipment was acquired for the factory and, in September 2016, the plant was ready to commence operation. A gala opening was held on September 18, with the City Mayor opening the factory. The first items were ready for sale on September 25. During this period, the following cash inflows and outflows occurred: While searching for a suitable block of land, Seri placed an option to buy with three real estate agents at a cost of P1,000 each. Payment of option fees • Receipt of loan from bank • Payment to settlement agent for title search, stamp duties, and settlement fees • Payment of delinquent property taxes assumed by Seri Company • Payment for land Payment for demolition of old building • Proceeds from sale of material from old building • Payment to architect • Payment to City Hall for approval of building construction • Payment for safety fence around construction site • Payment to construction contractor for factory building • Payment for external driveways, parking bays, and safety lighting • Payment of interest on construction loan • Payment for safety inspection on building • Payment for equipment Payment for freight and insurance costs on delivery of equipment • Payment of installation cost on equipment • Payment for safety equipment surrounding equipment • Payment for removal of safety fence • Payment for new fence surrounding the factory • Payment for advertisements in the newspaper about the forthcoming factory and its benefits to the community • Payment for opening ceremony Payments to adjust equipment to more efficient operating levels subsequent to initial operation P 3,000 3,000,000 100,000 50,000 1,000,000 120,000 55,000 230,000 120,000 34,000 2,400,000 540,000 400,000 30,000 640,000 56,000 120,000 110,000 20,000 80,000 5,000 60,000 33,000
Expert Solution
steps

Step by step

Solved in 2 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Accounting for Estates and Trusts
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Financial Accounting
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Financial Accounting
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS