A

Subject:AccountingPrice:9.82 Bought3

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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