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JONATHAN TIPAY
EXB Corporation, a manufacturer of steel products, began operation on October 1, 2016. The
accounting department of EXB has started the fixed-asset and depreciation schedule presented
below.
EXB CORPORATION
Fixed Asset and Depreciation Schedule
For Fiscal Years Ended September 30, 2017 and September 30, 2018
Depreciation
Expense Year
Ended Sept. 30
Acq. Dep.
Assets Date Cost Salvage Method Life 2017 2018
Land A 10/1/16 ? N/A N/A N/A N/A N/A
You have been asked to assist in completing this schedule. In addition in ascertaining that the data
already on the schedule are correct, you have obtained the following information from the
Company’s records and personnel:
a. Land A and Building A were acquired from a predecessor corporation. EXB paid P6, 560,000
for the land and building together. At the time of acquisition, the land had an appraised value
of P720, 000 and the building had an appraised value of P6, 480,000.
b. Land B was acquired on October 2 2016, in exchange for 20,000 ordinary shares pf EXB. At
the date of acquisition, the share had a par value of P5 per share and a fair value of P30 per
share. During October 2016, EXB paid P128, 000 to demolish an existing building on this land
so it could construct new building.
e. Machinery A’s total cost of P1, 319,200 includes installation expense of P4, 800 and normal
repairs and maintenance of P119, 200. Salvage value is estimated at P48, 000. Machinery A
was sold on February 1, 2017.
f. On October 1, 2016 Machinery B was acquired with a down payment of P45, 920 and the
remaining payments to be made in 11 annual installments of P48, 000 each beginning
October 1, 2016. The prevailing interest rate was 8%
Questions: