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Problem 5 mercedes benz company owned three

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3,500,000
PROBLEM 5Mercedes-Benz Company owned three properties which are classified as investment property.Initial costFV 2015FV 2016Property 12,700,0003,200,0003,500,000Property 23,450,0003, 050,0002,850,000Property 33,300,0003,850,0003,600,000Each property was acquired 3 years ago with a useful life of 25 years the accounting policy is touse the fair value method for investment propertyWhat is the gain or loss to be recognized for the year ended December 31, 2016
PROBLEM 6In 2014, Garlian Mining Company purchased property with natural resources for P28,000,000.The property had a residual value of P5,000,000.However, the entity is required to restore the property to the original condition at a discountedamount of P2,000,000.In 2014, the entity spent P1,000,000 in development cost.In 2015, an amount of P1,000,000 was spent for additional development on the mine.
The tonnage mined and estimated remaining tons for years 2014-2016 are as follows:YearTonsExtractedEstimatedTons Remaining2014010,000,00020153,000,0007,000,00020163,500,0002,500,000What amount should be recognized as depletion for 2016?
DEPELETION 2015Cost of landP28,000,000Estimated restoration cost2,000,000Development cost20141,000,000Development cost20151,000,000Total cost32,000,000Residual value(5,000,000)Depletable amount27,000,000Tons extracted in 20153,000,000Remaining tonsDec 31, 20157,000,000Total estimated output - Jan 1, 201510,000,000Rate in 2015 (27,000,000/10,000,000)2.70Depletion 2015 (3,000,000 * 2.7)8,100,000DEPELETION 2016Tons extracted in 20163,500,000Remaining tonsDec 31, 20162,500,000Total estimated output - Jan 1, 20166,000,000Original depletable amount27,000,000
PROBLEM 7In connection with your audit of Yeoj Corporation’s financial statements for the year 2017, younoted the following liability account balances as of December 31, 2016:12% Notes Payable3,200,00010% Notes Payable2,500,000Transactions during 2017 and other information relating to Yeoj’s liabilities were as follows:a) The 12% note is dated May 1, 2016 and is payable in four equal annual installments of800,000 beginning May 1, 2017. The first principal and interest payment was made on May 1,2017.b) The 10% 2,500,000 loan payable will mature on July 1, 2018. Interest on the loan is due everyJuly 1 and December 31. On December 1, 2017 the company entered into refinancingagreement with a bank to refinance the loan on a long term basis. The refinancing and roll overtransaction was completed on December 31, 2017.c) On January 1, 2017 the Company purchased a machinery by paying cash of 400,000 andissuing a 10% interest bearing note payable of 1,600,000 due in 4 equal annual installmentsstarting December 31, 2017. The prevailing interest rate for this type of note is 12%.Question:

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Term
Winter
Professor
NoProfessor
Tags
1966, 1986, 1971, 1982

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