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InfiormaUon for PAITIDAY CORPORATION'S Property, Plant and Equipment for zofg ls as foilows:-
Amunt balances at fanualy 1, 2O16:
Debit Credit
Land P 450,000
Bulldlng 3,600,000
Accumulafsd deprecdUon P789,300
Macfrinery bhd equipment 2,700,000
AccumulaBd depreclaUon 750,000
Automo$\re equipment 345,000
Acctjmu lated depreciation 253,800
The residualvaiue of the depreciable asseB ls immateriat. It is the compant's policy to compute
depreciaBon trc the nearest month.
2. On Aprll 1,2016, a machine purctraseci forP69r00Qon AF,ril 1,2011 was destrcryed.by ftre.
Panday recoverd P46,500 from its insurance'Ubmpany.
3. On May 1, 2016, costs of P504,000 were incurred to irnprove leased office premises. The
leasehold improvements have a useful llfe of 8 yeais. The related lease, whiclr terminates on
. Decenrber 3L,2022, is renewable for an addiUorual 6-yeir term. 'Ihe decision to rene-ur will
be made ln 2022 basd on office spae rreeds at that Ume,
4, On July 1, 2016, machinery and equipment were purchased at a toEl invoice cost of P840,000;
addiUonal costs of P15,000 for freight and P75,000 for installation were incurred.
5. Panday determined that the automoUve equipment comprising the P345,000 balance at
January 1, 2016 would have been depreciated at a totai amount of*54.000 for the year ended
December 31,2016.
7. What ls the total depreciaUon o<pense for the year encied Drcemirer 3:t, 2016?
A. P594,207 B. P584,967 c. P593,367 D. P588,867
8. What is the total accumulated depreciaUon balance orr December 11.,2A!,6?
A. P2,328,557 B. p2;j3,057 C. p2/,60,667 D. p2,351,967