Ttre Ccniic Sans Company self-constructed an asset for rts own ,,.rse.

Cc:rstruction started o1- J-a1q-ary 7,2017 and the asset was

conrple:tecl on Decemlg-1 3j-2Q!7. The company had a two-year, lBrr, loan of -IS-Q-Q,QpO,-specificail.Dobtained to finance the asset
corrsrruction iunds iiot yet needed during the construction were tehporarily'invested in a short-term debt securities yielding a
pt C.00C interest revenue. The company also had a rP-68,qrqq9 ,S-year term with interest of 20o/o
_general borrowings amounting to
;, .t ir,,r)00,00O, l0-year term with interest of 18o/o were used in part in the self -construction "^, . ,

Costs incurred during the year were as follows:

January 1 - P400,000 - P500,000

April 1
August 1 - P480,000 December 1 - P180,000
o,'a,-
32. t{ow much is the total capitalized interes-t?
)'^1", a. 155,000 t. 8O,OOO
b', 165,000 d. 91,875 - ... -,i-
. 33. How much interest shoutd be recognized as interest expense? t
' :' -'. ,'- ' ];
\r'
, a. 0 c.300,000 l.r;-.lr,r:;
"'l,'
j

;. iOe,rZS d. 135,000 ; ' 7,

,1 't.
.,-,. , -
The Optima Corporation rncurred the following expenditures which it had charged to Propedy, plant and equipment account, at"th'e
beoinnin{ o1' 2017:

l. Castr paid on purchase of land P220,000

','' Demoiition of a building erected on the purchased land 100,000
_ Legal fees for the land acquisition ' 25,000
.- Interest on loan for construction ",'.'.-it ""' 27,OOO
i- Labor and materials for the construction df the building 500,000
t: Architect's fees for the building 37,OAO
i; Excavation expenses 45,000
? Frxed overhead charged to the building 100,000
g Cost of Iemporary safety fence 50,000
10,000
? Pavment to squatteri to vaCate the premises -' r" - ' i " '1 t
30,000
'1_ 'a..t.>^d
_'':"_y_ -ssun"ed on the Iand purchaSed "'1't) 80,000
"'
i' :r.: :':ar33r-ar, oJarters for construction crew 50,000
, .. ,-_'_: :- c:-s:-.;ctron of the building equal to tne ditference beiween the appraised
vr -i E^C ac!ila, a31st-uction ccsts 120,000
c- ::-:, :-teS :. :a^j :.,e,,n9 :,..1e pe- :.j 20i4 _ 2Ol7 80,000
* .'--::::e lss--e: =".'? z^=:-.,::as:c 140,000
- :::: : aSsessn,eli-< 25,000
-.C.:st 3f cPt,on 9d:c to DUY i'e lano
''., Landscaping cost
15,000
_ 40,000
- " Cost of paving driveway and parking lot 20,000
,1,.u) ;.;"t Proceeds from sale of saivage materials 30,000

Ccc':ite'c- the ccrrect 2C17 baia:,ces of the fc: c,.,rnE

A BED
34. Land 565,000 585,000 605,000 625,000
35. Building 9 i 9.000 949,000 869,000 819,000

in January 2017, Nadeem Mining Company purchased a mineral mine for, P3.600,000 with removal ore estimates by geographicai
surveys qP,160,QOO tols. The property has an estimated vaiue of-P360,900-after the ore has been extraeted. Nadeem Company
incurred P1,O_Bqr_00_qpf development costs preparing the property for extiaction of ore. During 2017,-!-'---
270,000)tons were extraqtedr
and 240,Of'Oiona wErrlqol!.r - ',:-,:.,.;
- , .. t-.-',1 ' : l -H*L ' 1,,
,' 36. For th-e year ended December ?\, 2Ot7 , Nadeem should include what armount of depletio n? '-' : .. ;
a. 360,000 c. 52O,OOO -:. n '.)t..
'
On January t,z[l2,Franklin
Gothic Company purchased a machinery for!600,00Or'with an estimated economic ,r*rr, ,,L L, ,,
years. Straight line method of depreciation is to be used. On December 31,2015, it was properly determined that the_.fair: villg
less cost of disposal is !235,0O0-'while the value in use is P240,00_9, -Qn.J_a1uary l, 2018, it was Frep.,i-ly computed that the
r*ecoverableamountof theassetisf_]50r0!-0, --",..,.,.
.\, ! ,.,^-,0,.r.., -'t .' .'
' 37. HourmuchistheampairmentlossonDecembersr;zOiie -:r".r'. F i )-t,.- l
\ s. 0 c. 165,000 "
b. 110,000 d. 160,000 ,./ - t

l. ' 38. How much impairment recovery should be reported on January l, 2O1B?
' a. 5O,OO0 c. 120,000 * ' --.frl 'i 1r, jir,::fi.'f). I
b. 70,000 d. 0

Bodoni Corp. purchased a machinery January t,2015, at a cost of P1,000,000-" I[ is being depreciated using the straighi l:i
method over its projected.useful life o.[--1!-Vears.. At December 31,2m6, the asset's fair value was P1,200,0_00. Accordingly, ;
entry was made on that date to recognize the revaluation write up.

A revaluation was made again on December 31, 2018 wherein the sound value of the asset was determined to be p570,000.
company has the policy of transferring any revaluation surpius to retdinedG-#iiifigs as the asset is being used up. ' -;-

39. How much is the revaluation surplus on December 31, 2016?

{ a. 500,000 c. 1,200,000
b. 400,000 d. 0 "- ), r