Reference no: EM133131064

Questions -

1. A piece of equipment is acquired by an entity by issuing 10,000 shares of P10 par ordinary shares. The equipment has a list price of P150,000 and a trade discount of 10%. If paid in cash at the time of purchase, a 5% cash discount is allowed. The company's ordinary shares are actively traded in a capital market with an average market price of P13 at the date of the exchange. What is the cost of the equipment?

a. P130,000

b. P150,000

c. P135,000

d. P128,250

2. The property, plant and equipment account of Cuddle PH was revisited by its property officers. They discovered that due to obsolescence, machineries with a total historical cost of P2,100,000 and accumulated depreciation of P1,750,000, will no longer provide economic benefits to the company wither from its disposal or use.

Which of the following will be included in the journal entries to record the derecognition of these machineries?

a. credit Accumulated Depreciation, P1,750,000

b. credit Loss from Derecognition, P350,000

c. credit Machineries, P350,000

d. credit Machineries, P2,100,000

3. Jungkook Co. purchased goods with invoice price of P3,000 on account on December 27, 2021. The related shipping costs amounted to P50. The seller shipped the goods on December 31, 2021. Jungkook Co. received the goods on January 2, 2022 and settled the account on January 5, 2022. How much is the capitalizable cost of the inventory purchased if the terms of the shipment are FOB shipping point, freight prepaid?

a. P0

b. P3,000

c. P3,050

d. P2,950