WEAK, Inc. Pertinent data are shown below: FEEBLE Co. WEAK, Inc. Equipment 4,000,000 8,000,000 Accumulated depreciation 800,000 3,200,000 Carrying amount 3,200,000 4,800,000 Fair value ? 4,400,000 Cash paid by FEEBLE to WEAK 600,000 600,000 In FEEBLE’s books, what amounts are recognized for the following? Equipment Gain (Loss) a. 5,000,000 1,200,000 b. 4,400,000 600,000 c. 3,800,000 1,200,000 d. 3,400,000 (600,000)
FEEBLE Co. exchanged equipment with WEAK, Inc. Pertinent data are shown below:
FEEBLE
Co.
WEAK,
Inc.
Equipment 4,000,000 8,000,000
Accumulated
Carrying amount 3,200,000 4,800,000
Fair value ? 4,400,000
Cash paid by FEEBLE to WEAK 600,000 600,000
In FEEBLE’s books, what amounts are recognized for the following?
Equipment Gain (Loss)
a. 5,000,000 1,200,000
b. 4,400,000 600,000
c. 3,800,000 1,200,000
d. 3,400,000 (600,000)
Use the following information for the next three questions:
Altitude Company purchased a plot of land for ₱2,000,000 as a plant site. There was a small office
building on the plot, conservatively appraised at ₱700,000 which the company will continue to use with
some modification and renovation.
The renovation had plans drawn for a factory and received bids for its construction. It rejected all bids
and decided to construct the plant itself. Below are listed additional items that management feels should
be included in the property, plant and equipment accounts:
Materials and supplies 3,000,000
Excavation 100,000
Labor on construction 2,500,000
Cost remodeling office building 200,000
Legal cost on conveying land 10,000
Imputed interest on corporation own money
used during construction 120,000
Cash discounts on materials purchased, not taken 60,000
Supervision by management 70,000
Compensation insurance premium for workers 20,000
Clerical and other expenses related to construction 30,000
Paving of streets & sidewalks, not included in blueprint 40,000
Plans and specifications 140,000
Payment for claim for injuries not covered by insurance 25,000
Legal cost of injury claim 15,000
Saving on construction 200,000
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