Subject:AccountingPrice:9.82 Bought3
A.
Ocean Company recently acquired several items of property, plant and equipment. The transactions are as follows:
1. Purchases a building for P1, 000, 000 in cash and 50, 000 shares of Ocean company with P100 par value which sold for P120 on transaction date.
2. Received a parcel of land located in Davao City from a philanthropist as an inducement to locate a plant in the city. The land has a fair value of P1, 500, 000.
3. Acquired a machinery for cash. The machinery was priced at P800, 000 and a 5% cash discount is allowed.
4. Acquired an equipment for P200, 000 by issuing a 60-day, 12% note.
Required:
Determine the cost of the ff:
Building_____________________
Land______________________
Machinery_________________
Equipment_____________________
B.
Smile company exchanged used equipment for another equipment of Frown Company. The following information pertains to the exchange:
Smile Frown
Equipment 2, 400, 000 2, 200, 000
Accumulated Depreciation 2, 000, 000 1, 750, 000
Fair value of equipment 500, 000 500, 000
Required: Journal entries on the books of smile and frown
Purchased 3 times