A company paid $20,000,000 for land and building in a single purchase transaction. The land had been appraised for $18,000,000 and the building for $6,000,000. If the accountant were to record the acquisition with a credit to cash as $20,000,000 and a debit to land of $18,000,000 Options: None of the other alternatives are correct net income in previous years would be understated net income in future years would be correctly stated net income in future years would be understated net income in future years would be overstated
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- 5. During the current year an entity sold a piece of equipment used in production. The equipment had been accounted for using the revaluation method and details of the accounts and sale are presented below: Sales price P100,000 Equipment carrying amount (net) 90,000 Revaluation surplus 20,000 Which of the following is correct regarding recording the sale? Group of answer choices The gain that should be recorded in other comprehensive income is P10,000 The gain that should be recorded in profit and loss is P10,000; the P20,000 revaluation surplus may be transferred to retained earnings. The gain that should be recorded in other comprehensive income is P30,000 The gain that should be recorded in profit and loss is P30,000Cast Exercise Equipment, Inc. reported the following financial statements for 2024: (Click the icon to view the income statement.)(Click the icon to view the comparative balance sheet.) Read the requirements. Requirement 1. Compute the amount of Cast Exercise's acquisition of plant assets. Cast Exercise disposed of plant assets at book value. The cost and accumulated depreciation of the disposed asset was $43,400. No cash was received upon disposal. The acquisitions of plant assets amounts to Data table C Cast Exercise Equipment, Inc. Income Statement Year Ended December 31, 2024 Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses: Net Income Depreciation Expense Other Operating Expenses Total Operating Expenses Print $ 47,000 195,000 Done $ $ - X 716,000 346,000 370,000 242,000 128,000Use the following information for the next six questions. You are auditing the financial statements of DISUKO Corporation and obtained the following information. DISUKO acquired an investment for P1,000,000. Transaction costs amount to P10,000. At year-end, the investment has a fair value of P900,000. 1. If the investment is classified as financial asset at fair value through profit or loss, how much would it be recorded upon acquisition? 2. If the investment is classified as financial asset at fair value through profit or loss, what is the amount of unrealized gain or loss to be reported in the statement of comprehensive income? 3. If the investment is classified as financial asset at fair value through other comprehensive income, how much would it be recorded upon acquisition? 4. If the investment is classified as as financial asset at fair value through other comprehensive income, what is the amount of unrealized gain or loss. to be reported in the income statement? 5. If the…
- Carver Inc. purchased a building and the land on which the building is situated for a total cost of $700,000 cash. The land was appraised at $320,000 and the building at $480,000. Required What is the accounting term for this type of acquisition? Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building. Would the company recognize a gain on the purchase? Record the purchase in a horizontal statements model.Diva Ltd has an item of equipment with a carrying amount of $110000 (cost $150000 less accumulated depreciation $40000). the following data has been obtained by Diva in relation to the asset; estimated fair value of the asset less costs of disposal - $90,000 present value of future cash flows expected to be derived from the asset $70000 To account for the impairment loss, the accountant for Diva is considering a number of accounting entries. In accordance with IAS 16 Property, Plant and Equipment and IAS 36 impairment of assets, which one of the following entries is made to recognise the impairment loss?[The following information applies to the questions displayed below.] Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $840,000. The estimated market values of the purchased assets are building, $432,400; land, $282,000; land improvements, $37,600; and four vehicles, $188,000. Required: 1-a. Allocate the lump-sum purchase price to the separate assets purchased. 1-b. Prepare the journal entry to record the purchase. 2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $31,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Complete this question by entering your answers in the tabs below. Required 1A Required 18 Required 2 Required 3 Allocate the lump-sum purchase price to the separate assets purchased. Allocation of total cost Building Land Land…
- May I ask for help with this question? I got an answer of 100,000 (Rounded Up) Please check. W Co. acquired the intangible assets listed below for a total lump sum price of P400,000.A primary beneficiary company has established control over a VIE by guaranteeing its long term debt and by establishing an income distribution contract. The balance sheet of the VIE on the acquisition date was as follows: Current assets . . . . . . . . . . . . 100,000 Land and buildings . . . . . . . 600,000 Accumulated depreciation (100,000) Equipment . . . . . . . . . . . . . . . 300,000 Accumulated depreciation . (50,000) Total assets. . . . . . . . . . . . . . . 850,000 Current liabilities . . .. . . . . . . . 70,000 Long term note payable . . 700,000 Common stock, $1 par . . . . . . 5,000 Paid-in excess of par . . . . . .. . 45,000 Retained earnings . . . . . . .. . . 30,000 Total liabilities and equity .. 850,000 The fair values of the land and buildings are $800,000. The fair value of the equipment is $400,000. The fair value of the company’s net (of debt) assets is estimated to be $600,000. Prepare the distribution of excess schedule.Carver Inc. purchased a building and the land on which the building is situated for a total cost of $922,800 cash. The land was appraised at $244,081 and the building at $817,139. What is the accounting term for this type of acquisition? Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building. Would the company recognize a gain on the purchase? Record the purchase in a horizontal statements model.
- Current Attempt in Progress These expenditures were incurred by Cullumber Company in purchasing land: cash price $60,010, assumed accrued taxes $5,490, attorney's fees $2,260, real estate broker's commission $3,960, and clearing and grading $4,220. What is the cost of the land? The cost of the land $These expenditures were incurred by Blossom Company in purchasing land: cash price $55,000, assumed accrued property taxes $4,500, attorney's fees $2,100, real estate broker's commission $3,000, and clearing and grading $4,000. What is the cost of the land? The cost of the land 73900[The following information applies to the questions displayed below.] Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $810,000. The estimated market values of the purchased assets are building, $467,950; land, $257,850; land improvements, $47,750; and four vehicles, $181,450. Required: 1-a. Allocate the lump-sum purchase price to the separate assets purchased. 1-b. Prepare the journal entry to record the purchase. 2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $31,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Required 3 Allocate the lump-sum purchase price to the separate assets purchased. Total cost of Acquisition Allocation of total cost…