8/30/22, 10:39 AM PPE Quiz 2
PPE Quiz 2 Total points 30/35
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PPE
Untitled Section 30 of 35 points
What is the cost of new building on December 31, 2020? * 1/1
P12,600,000
P11,900,000
P12,300,000
P12,900,000
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8/30/22, 10:39 AM PPE Quiz 2
What is the cost of new building on June 30, 2021? * 1/1
P19,884,000
P16,884,000
P19,734,000
P19,050,000
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8/30/22, 10:39 AM PPE Quiz 2
Quick Company purchased a varnishing machine for P3,000,000 on *0/1
January 1, 2020. The entity received a government grant of P500,000 in
respect of this asset. The accounting policy is to depreciate the asset
over 4 years on a straight line basis and to treat the grant as deferred
income. What is the carrying amount of the asset on December 31, 2020?
P3,000,000
P2,500,000
P1,875,000
P2,250,000
Correct answer
P2,250,000
Quick Company purchased a varnishing machine for P3,000,000 on *2/2
January 1, 2020. The entity received a government grant of P500,000 in
respect of this asset. The accounting policy is to depreciate the asset
over 4 years on a straight line basis and to treat the grant as deferred
income.What amount of income from the government grant is recognized
for 2020?
P500,000
P250,000
P0
P125,000
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8/30/22, 10:39 AM PPE Quiz 2
What is the cost of the land? * 2/2
P13,750,000
P14,150,000
P14,250,000
P13,850,000
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8/30/22, 10:39 AM PPE Quiz 2
Using the same data, what is the cost of the land improvements? * 2/2
P1,300,000
P400,000
P900,000
P500,000
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8/30/22, 10:39 AM PPE Quiz 2
Using the same data, what is the cost of the newly constructed building? *0/2
P6,300,000
P6,200,000
P6,100,000
P6,700,000
Correct answer
P6,100,000
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8/30/22, 10:39 AM PPE Quiz 2
Using the same data, what is the cost that shall be expensed as incurred? * 2/2
P1,100,000
P1,200,000
P1,300,000
P1,000,000
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8/30/22, 10:39 AM PPE Quiz 2
On January 1, 20x1, Entity A received land with fair of ₱200,000 from the *2/2
government conditioned on the construction of a building on the lot.
Entity A started immediately the construction and it was completed on
December 31, 20x1 for a total cost of ₱1,000,000. The building has an
estimated useful life of 10 years and zero residual value. How much is
the income from government grant in 20x1 and 20x2, respectively?
20,000 ; 20,000
0 ; 20,000
0 ; 200,000
200,000 ; 0
On January 1, 20x1, Entity A received land with fair of ₱200,000 from the *2/2
government conditioned on the construction of a building on the lot.
Entity A started immediately the construction and it was completed on
December 31, 20x1 for a total cost of ₱1,000,000. The building has an
estimated useful life of 10 years and zero residual value. How much is
the carrying amount of the building on December 31, 20x2 under the
following presentations? Gross presentation Net presentation
800,000 ; 640,000
1,000,000 ; 800,000
800,000 ; 533,333
900,000 ; 720,000
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8/30/22, 10:39 AM PPE Quiz 2
On January 1, 20x1, Entity A received land with fair of ₱200,000 from the *2/2
government conditioned on the construction of a building on the lot.
Entity A started immediately the construction and it was completed on
December 31, 20x1 for a total cost of ₱1,000,000. The building has an
estimated useful life of 10 years and zero residual value. How much is
the depreciation expense recognized in 20x3 under the following
presentations? Gross presentation Net presentation
80,000 ; 80,000
100,000 ; 100,000
100,000 ; 80,000
80,000 ; 100,000
How much borrowing costs are capitalized to the cost of the constructed *2/2
qualifying asset?
920,000
971,111
1,026,667
1,045,000
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8/30/22, 10:39 AM PPE Quiz 2
How much is the cost of the qualifying asset on initial recognition? * 2/2
14,971,111
14,920,000
15,045,000
13,010,000
Merry Co. purchased a machine costing ₱125,000 for its manufacturing *2/2
operations and paid shipping costs of ₱20,000. Merry spent an additional
₱10,000 in testing and preparing the machine for use. What amount
should Merry record as cost of the machine?
125,000
155,000
135,000
145,000
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8/30/22, 10:39 AM PPE Quiz 2
Peterson, Inc. purchased a machine under a deferred payment contract *2/2
on December 31, 20x1. Under the terms of the contract, Peterson is
required to make eight annual payments of ₱140,000 each beginning
December 31, 20x2. The appropriate interest rate is 8%. The purchase
price of the machine is
1,120,000
1,389,190
868,900
804,520
* 0/2
40,400
41,650
41,100
39,200
Correct answer
41,650
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8/30/22, 10:39 AM PPE Quiz 2
* 2/2
917,500
952,500
930,000
910,000
* 2/2
422,000
442,000
460,000
464,000
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8/30/22, 10:39 AM PPE Quiz 2
* 2/2
910,000
930,000
952,500
917,500
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