Problem 4: 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_ what is the rule in solving the problem?

Problem 4: 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_ what is the rule in solving the problem?

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Problem 4: Ocean Company recently acquired several items of property, plant and equipment. The transactions are as follows: 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 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. Acquired a machinery for cash. The machinery was priced at P800, 000 and a 5% cash discount is allowed Acquired an equipment for P200, 000 by issuing a 60-day, 12% note. Required: Determine the cost of the ff: Building_____________________ Land______________________ Machinery_________________ Equipment_____________________ What is the rule in solving the problem?
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