Scribd Logo
Upload

Welcome to Scribd!

  • 73 views

    M8 PP

    Uploaded by

    Gabriel Orolfo
    1. The cost of the land was P320,000 and the cost of the new building was P1,034,100. The savings to be recognized as other income is P465,900. 2. The amounts COVID should record are: Land - P180,000; Warehouse - P315,000; Office Building - P129,000; Accumulated Depreciation - P34,500. The entry is: Land - debit P180,000, Warehouse - debit P315,000, Office Building - debit P129,000, Accumulated Depreciation - credit P34,500.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    M8 PP

    Uploaded by

    Gabriel Orolfo
    73 views1 page
    1. The cost of the land was P320,000 and the cost of the new building was P1,034,100. The savings to be recognized as other income is P465,900. 2. The amounts COVID should record are: Land - P180,000; Warehouse - P315,000; Office Building - P129,000; Accumulated Depreciation - P34,500. The entry is: Land - debit P180,000, Warehouse - debit P315,000, Office Building - debit P129,000, Accumulated Depreciation - credit P34,500.

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1. The cost of the land was P320,000 and the cost of the new building was P1,034,100. The savings to be recognized as other income is P465,900. 2. The amounts COVID should record are: Land - P180,000; Warehouse - P315,000; Office Building - P129,000; Accumulated Depreciation - P34,500. The entry is: Land - debit P180,000, Warehouse - debit P315,000, Office Building - debit P129,000, Accumulated Depreciation - credit P34,500.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    73 views1 page

    M8 PP

    Uploaded by

    Gabriel Orolfo
    1. The cost of the land was P320,000 and the cost of the new building was P1,034,100. The savings to be recognized as other income is P465,900. 2. The amounts COVID should record are: Land - P180,000; Warehouse - P315,000; Office Building - P129,000; Accumulated Depreciation - P34,500. The entry is: Land - debit P180,000, Warehouse - debit P315,000, Office Building - debit P129,000, Accumulated Depreciation - credit P34,500.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 1

    M8 Auditing PPE

    PRACTICE PROBLEM

    1. On February 1, 2019, CORONA Corporation purchased a parcel of land as a factory site for
    P320,000. An old building on the property was demolished and construction begun on a new
    warehouse that was completed April 15, 2020. Costs incurred on the construction project are
    listed below.

    Demolition of old building ........................... P 21,000


    Architect's fees ..................................... 31,700
    Legal fees--title investigation ...................... 4,100
    Construction costs ................................... 950,000
    Imputed interest based on stock financing ............ 14,000
    Landfill for building site ........................... 19,300
    Clearing of trees from building site ................. 9,600
    Temporary buildings used for construction activities . 29,000
    Land survey .......................................... 4,000
    Excavation for basement .............................. 13,200
       (Salvage materials from demolition sold for P1,800)
       (Timber sold for P3,300)

    If the building was constructed by the other company it will cost P1,500,000. The savings
    on construction will be recognized after the audit as part of other income.

    1. 1. As auditor, determine the cost of the land and new building.

    2. How much savings to be recognized as part of other income?

    2. On May 1, 2019, COVID Corporation purchased for P690,000 a tract of land on which a
    warehouse and office building were located. The following data were collected concerning
    the property:

    Current Assessed Vendor's


    Valuation Original Cost
    Land ............................. P280,000 P180,000
    Warehouse ........................ 320,000 315,000
    Office Building .................. 200,000 129,000
    P800,000 P624,000

    Your audit shows that COVID the account used for the acquisition was Land and Building
    with a total balance of P690,000 and the related accumulated depreciation account with
    P69,000 balance as of December 31, 2019 for 10 year life. Straight line method was used
    and the the estimated life used was correct.

    1. As auditor, determine the appropriate amounts that COVID should record for the land,
    warehouse, and office building and the related accumulated depreciation.

    2. Give the entry for the audit adjustments.

    You might also like