On January 1, 2020, CDO Corporation determined to sell a group of assets within its shoe manufacturing division, as it believed it was cheaper to buy the parts from China. The assets that it wanted to sell had the following carrying amounts: Factory P22,000,000 Accumulated depreciation (12,000,000) Raw materials 3,800,000 Spare parts 2,200,000 The management of CDO calculated the fair value less costs to sell of the disposal group to be P14,400,000. The assets were sold on February 15, 2020 for P15,400,000, with selling costs amounting to P700,000. Before income taxes, how much should be recognized as gain (loss) on sale of the disposal group?

On January 1, 2020, CDO Corporation determined to sell a group of assets within its shoe manufacturing division, as it believed it was cheaper to buy the parts from China. The assets that it wanted to sell had the following carrying amounts: Factory P22,000,000 Accumulated depreciation (12,000,000) Raw materials 3,800,000 Spare parts 2,200,000 The management of CDO calculated the fair value less costs to sell of the disposal group to be P14,400,000. The assets were sold on February 15, 2020 for P15,400,000, with selling costs amounting to P700,000. Before income taxes, how much should be recognized as gain (loss) on sale of the disposal group?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 22E: Thaler Company bought 26,000 of raw materials a year ago in anticipation of producing 5,000 units of...

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On January 1, 2020, CDO Corporation determined to sell a group of assets within its shoe manufacturing division, as it believed it was cheaper to buy the parts from China. The assets that it wanted to sell had the following carrying amounts: Factory P22,000,000 Accumulated depreciation. Raw materials (12.000.000) 3.800,000 2.200,000 The management of CDO calculated the fair value less costs to sell of the disposal group to be P14.400,000 Spare parts The assets were sold on February 15, 2020 for P15.400,000, with selling costs amountinit to P700.000 The following balances have been excerpted from Tito Piccolo's statement of financial position: December 31 January 1 Prepaid Insurance 6,000 P 7,500. Interest Receivable Salaries Payable 3,700 61.500 53,000 14.500 Accounts Receivable 550.000 415,000 25,000 Allowance for bad debts i 40,000 Tito Piccolo Company reported the following during 2020 the following items: Insurance premiums paid 41,500 Interest collected 123.500 Salaries paid Sales…
CDO Corporation determined to sell a group of assets within its shoe manufacturing division, as it believed it was cheaper to buy the parts from China. The assets that it wanted to sell had the following carrying amounts: Factory P 22,000,000 Accumulated depreciation (12,000,000) Raw materials 3,800,000 Spare parts The management of CDO calculated the fair value less costs to sell of the disposal group to be P14.400,000. The assets were sold on February 15, 2020 for P15,400,000, with selling costs amounting to P700,000. Before income taxes, how much should be recognized as gain (loss) on sale of the disposal group?
14.ABC Company is committed to a plan to sell a building and has started looking for a buyer for that building. The company will continue to use the building until another building is completed to house the office staff located in the building. There is no intention to relocate the office staff until the new building is completed. As of Dec 31, 2021, the building has a carrying amount of P250,000 and fair value less costs to sell amounted to P235,000. How much will be presented as Assets-Held-for-Sale in the statement of financial position at Dec 31, 2021? 15.During 2021, Entity F incurred P4,000,000 in exploration costs for each of 15 oil wells drilled in 2021. Of the 15 wells drilled, 10 were dry holes. The entity uses the successful efforts method of accounting. Assuming that the entity depletes 30% of the oil discovered in 2021, what amount of these exploration costs would remain in its Dec 31, 2021 statement of financial position?
On December 31, 2021, Patrice Inc. determined to sell a group of assets within its meat processing plant, as it believed a newly introduced set of machineries would be more economical for the company. The assets that it wanted to sell had the following carrying amounts: Machinery P 2,200,000 Accumulated depreciation 1,200,000 Machinery tools 380,000 Machinery parts 220,000 The management of Patrice Inc. calculated the fair value (based on active market for similar assets ) less costs to sell of the disposal group to be P 1,400,000. The assets were sold on March 17, 2022 for P 1,520,000. Selling costs of P 60,000 were paid. Required: Prepare the entries on December 31, 2021. Prepare the entry for the sale of the assets on March 17, 2022.
On December 31, 2020, Patriarch, Inc. determined to sell a group of assets within its meat processing plant, as it believed a newly introduced set of machineries would be more economical for the company. The assets that it wanted to sell had the following carrying amounts: Machinery 2,200,000 Accumulated depreciation 1,200,000 Machinery tools 380,000 Machinery parts 220,000 The management of Patriarch, Inc. calculated the fair value (based on active market for similar assets) less cost to sell of the disposal group to be P1,400,000. The assets were sold on March 17, 2021 for P1,520,000. Selling costs of P60,000 were paid. Required: Prepare the entries on December 31, 2020.
On December 31, 2020, Patriarch, Inc. determined to sell a group of assets within its meat processing plant, as it believed a newly introduced set of machineries would be more economical for the company. The assets that it wanted to sell had the following carrying amounts: Machinery 2,200,000 Accumulated depreciation 1,200,000 Machinery tools 380,000 Machinery parts 220,000 The management of Patriarch, Inc. calculated the fair value (based on active market for similar assets) less cost to sell of the disposal group to be P1,400,000. The assets were sold on March 17, 2021 for P1,520,000. Selling costs of P60,000 were paid. Required: Prepare the entry for the sale of the assets on March 17, 2020.
53. Chemi Co. produces chemicals Koo and Lam and incident to their production recovers a by-product, Boo. The joint costs of processing is reduced by the net realizable value of Boo. For the month of May 2021, the joint costs of processing amount to P3,840,000. Additional information are shown below: a. P1,800,000 b. • P2,160,000 c. • P2,208,000 d. • P2,700,000
16. Howton Paper Company purchased $1,400,000 of timberland in 2021 for its paper operations. Howton estimates that there are 10,000 hectares of timberland and it cut 2,000 hectares in 2022. The land is expected to have a residual value of $200,000 once all the timber is cut. Which of the following is true with regard to depletion? a.Depletion will cause Howton's timber inventory to increase. b.Howton will record depletion expense of $280,000 in 2022. c.Howton's depletion rate is $140 per hectare of timber. d.Howton should deplete the timber at a rate of 20% (2,000 hectares + 10,000 hectares) per year.
35.During 2021, King Co. incurred the following costs: Testing in search for process alternatives 720,000 Costs of testing prototype and design modifications 500,000 Modification of the formulation of a process 1,220,000 Research and development services performed by Queen Corp. for King 650,000 In King's 2021 statement of profit or loss, research and development expense should be 1,220,000 1,870,000 2,590,000 3,090,000
12 The following costs were incurred by ABCDEFGH, Inc.. during 2020: July 1 Organization fees P120,000 July 2 Land site and old building 1,890,000 July 3 Option payments 250,000 July 20 Broker’s fees on property acquired 110,400 July 30 Cost of remodeling the building 60,000 August 30 Salaries of executives 360,000 December 21 Real property taxes 240,000 Additional information: The building acquired had a fair value of P450,000 while the land was currently appraised at P1,800,000 P50,000 of the option money paid were for properties not acquired. The executives had no participation on the remodeling of the building The property taxes were for the 2020 calendar year. How much is the cost of land? Group of answer choices 1,856,320 1,992,320 1,512,000 2,288,000
1.In February 2019, Wall Corp decided to sell its entire Plant division. The Plant division was a major part of Wall Corp's business and the sale will result in a strategic change in direction for the company. The sale was completed in January 2020 and resulted in a gain on disposal of P500,000. In 2019 Plant's net losses were P350,000 and P20,000 in 2020 up until the date of sale. Excluding taxation, what should the net gain/(loss) to be reported in the income statements of Wall Corp for its Plant division? A.2019 (P350,000) / 2020 P500,000 B. 2019 (P350,000) / 2020 P480,000 C. 2019 P230,000 / 2020 P0 D. 2019 P0 / 2020 P230,000
q On June 30, 2024, Prego Equipment purchased a precision laser-guided steel punch that has an expected capacity of 300,000 units and no residual value. The cost of the machine was $450,000 and is to be depreciated using the units-of-production method. During the six months of 2024, 24,000 units of product were produced. At the beginning of 2025, engineers estimated that the machine can realistically be used to produce only another 230,000 units. During 2025, 70,000 units were produced. The company would report depreciation in 2024 of: $36,000. $43,900. $18,000. $21,950.