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WorksheetsPPE, Part 1
Total questions: 11
Worksheet time: 13mins
Major spare parts and stand-by equipment which an entity expects to use over more than one period would qualify as
Inventory
Property, plant and equipment
Deferred charge
Expense
The cost of an item of property, plant and equipment comprises all of the following, except
Purchase price
Import duties and nonrefundable purchase taxes
Any cost directly attributable in bringing the asset to the location and condition for its intended use
Initial estimate of the cost of dismantling and removing the item and restoring the site, the obligation for whichthe entity does not incur when the item was acquired
Costs that are expensed immediately include all of the following, except
Cost of opening a new facility
Cost of introducing a new product or service, including costs of advertising and promotional activities
Cost of conducting business in a new location, including cost of staff training
Costs of testing whether the asset is functioning properly
The cost of an item of property, plant and equipment that is acquired in exchange for combination of monetary and nonmonetary asset is measured at the
Fair value of the asset given up plus the amount of any cash or cash equivalent transferred.
Fair value of the asset received plus the amount of any cash or cash equivalent transferred.
Carrying amount of the asset given up plus the amount of any cash or cash equivalent transferred.
Carrying amount of the asset received plus the amount of any cash or cash equivalent transferred.
If payment for an asset is deferred beyond normal credit terms, the difference between the total payment and cash price equivalent should be
Considered interest expense of the current year
Included as part of the asset cost
Amortized as interest expense over the life of the asset
Amortized as interest expense over the credit period
When an entity purchases land with a building on it and immediately tears down the building so that the land can be used for the construction of a plant, the cost incurred to tear down the building is
Expensed immediately
Added to the cost of the plant
Added to the cost of the land
Allocated to the cost of the plant and cost of the land on a prorata basis
The cost of land includes all of the following, except
Commission related to acquisition
Property tax after date of acquisition assumed by the purchaser
Property tax to date of acquisition assumed by the purchaser
Cost of survey
Chang’e Company purchased a new machinery on January 2, 2018 and incurred the following: Invoice price of machinery, P1,500,000; Cash discount taken on the machinery, P75,000; Freight on the new machine, P25,000; Actual cost of removing an old machinery P2,500 but the existing provision is P3,000; Installation cost of new machine, P25,000. Operating cost during the first month of regular use, P150,000. What is the cost of the new machinery?
P1,475,000
P1,477,500
P1,550,000
P1,552,500
Dyrroth Company buys a delivery van with a list price of P300,000. The dealer grants a 15% reduction in list price and an additional 2% cash discount on the net price if payment is made in 30 days. The company paid an extra P3,000 to have a special horn installed. What amount should the van be initially recorded?
P249,900
P252,900
P253,900
P256,900
In June 2018, Irithel Company acquired a machine in exchange for another machine with a cost of P1,200,000 and an accumulated depreciation of P600,000 and paid a cash difference of P160,000. The market value of the Irithel’s machine was P650,000. If the exchange has commercial substance, what would be the cost of the new asset acquired and the amount of gain to be recognized, respectively?
P440,000 & P50,000
P440,000 & P210,000
P810,000 & P50,000
P810,000 & P210,000
What are your thoughts and feelings about our first day of class?
