Information pertaining to Heroine Corporation’s property, plant and equipment for 2012 is presented below: Account balances at anuary 1, 2012: !and $uildings Accumulated depreciation % $uildings (ac)inery and equipment Accumulated depreciation % (ac)inery and equipment Automoti+e equipment Accumulated depreciation % Automoti+e equipment
Debit " 1#0,000 1,200,000
Credit
"2&',100 *00,000 2#0,000 11#,000 -,&00
.epreciation data:
$uildings (ac)inery and equipment Automoti+e equipment !ease)old impro+ements
Depreciation method
Useful life
1#0/ decliningbalance traig)tline umoft)eyears’digits traig)tline
2# years 10 years - years
)e sal+age +alues of t)e depreciable assets are immaterial3 .epreciation is computed to t)e nearest mont)3 ransactions during 2012 and ot)er information are as follows: a3
4n anuary anuary 2, 2012, 2012, Heroine purc)as purc)ased ed a new car for for "20,000 "20,000 cas) and tradein tradein of a 2yearo 2yearold ld car wit) wit) a cost of "1,000 and boo5 +alue of "#,-003 )e new car )as a cas) price of "2-,0006 t)e mar5et +alue of t)e trade in is not 5nown3
b3
4n April 1, 2012, 2012, a mac)ine mac)ine purc)ased purc)ased for "2',00 "2',000 0 on April 1, 2007, 2007, was destroy destroyed ed by fire, Heroine Heroine reco+er reco+ered ed "1#,#00 from its insurance company3
c3
4n (ay (ay 1, 2012 2012,, cost costss of "1&,0 "1&,000 00 were were incu incurr rred ed to impr impro+ o+e e leas leased ed offi office ce prem premis ises es33 )e )e leas lease) e)ol old d impro+ements )a+e a useful life of years3 )e related lease terminates on .ecember '1, 2013
d3
4n uly 1, 2012, 2012, mac)in mac)inery ery and equipme equipment nt were purc)as purc)ased ed at a total in+oic in+oice e cost of "20,000 "20,00066 additio additional nal costs of "#,000 for freig)t and "2#,000 for installation were incurred3
e3
Heroin Heroine e determi determined ned t)at t)e automot automoti+e i+e equipme equipment nt comprisi comprising ng t)e "11#,0 "11#,000 00 balance balance at anuar anuary y 1, 2012, would )a+e been depreciated at a total amount of "1,000 for t)e year ended .ecember '1, 20123
$ased on t)e information: 13
)e ad8usted ad8usted balance balance of (ac)ine (ac)inery ry and 9quipmen 9quipmentt at cost; cost; at .ecember .ecember '1, 2012 2012 is: " 1,17,000
23 )e ad8usted balance of Automoti+e 9quipment at cost; at .ecember '1, '1, 2012 is: " 121,000 '3
)e total ad8uste ad8usted d balance of Accumul Accumulated ated .epreciat .epreciation ion of "roperty "roperty and 9quipmen 9quipmentt at .ecember .ecember '1, 2012 is: is: " 77-,'*
-3
)e total total net gain gain loss; loss; from from disposal disposal of of assets assets at .ecember .ecember '1, 2012 2012 is: " 2,&00
#3
<)ic) of t)e following following is t)e best e+idence of continuous owners)ip owners)ip of property= A3 9>amination of t)e deed3 B. 9>amination of rent receipts from lessees of t)e property3 C3 9>amination of t)e title policy3 .3 9>amination of canceled c)ec5 in payment for t)e property3
