Assignment ID: FG133136981
Q1) Tin Company reported an impairment loss of P5,200,000 in its income statement for the year 2016. This loss was related to a building that was acquired on January 1, 2012 with a cost of P80,000,000 (no residual value). Depreciation on the building is computed on a straight-line basis at the rate of 4% per year. Depreciation for the year 2017 was computed based on the asset’s recoverable amount at December 31, 2016. On December 31, 2021, the entity decided to measure its building using revaluation model. This building was then appraised to a fair value of P50,000,000. What amount of gain on impairment recovery should Tin Company report in its 2021 income statement?
Q2) For more than a decade since its incorporation, Feb-Ibig Company had been renting its office space. The Company President thought of constructing their own building for P40,000,000 which they plan to start and finish until December 31, 2021. Feb-Ibig made the following payments, based on the construction contract, during 2021. · January 31- P5,000,000 · February 28- P8,000,000 · July 1- P15,000,000 · August 31- P10,000,000 · November 30- P2,000,000 Feb-Ibig secured a 10%, 4-year noted dated January 1, 2021, specifically intended for the construction. The amount was P20,000,000. Also, the entity had other debts outstanding as follows:
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8%, 6-year note dated December 31, 2019- P18,000,000
12%, 7-year noted dated December 31, 2018 – P22,000,000
What is the total cost of the building constructed?
Q3) Laguna Company purchased a machine with a cash price of P350,000. Laguna gave the following as payment:
Notes payable, non-interest bearing (payable in three equal annual payments, beginning 1/1/23)- P150,000
Laguna 1,000 ordinary shares, P100 par (fair value P130)- P100,000
How much is the discount on notes payable to be recorded on the date of purchase?