pany self-insures its property storm damage. d cost them $1920000 per year. The company estimates that, on average, it will incur losses of $1610000 per year. In 202 000 worth of losses were sustained. How much total expense and/or loss should be recognized by Cullumber Company fo
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- Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?Sunland Company self-insures its property for fire and storm damage. If the company were to obtain insurance on the property, it would cost them $1970000 per year. The company estimates that on average it will incur losses of $1610000 per year. During 2021, $705000 worth of losses were sustained. How much total expense and/or loss should be recognized by Sunland Company for 2021?1. Patriotic Company purchased a machine for P6,000,000 on January 1, 2019, and received a government grant of P600,000 toward the asset cost. The accounting policy is to treat the grant as a reduction in the cost of the asset. The machine is to be depreciated on a straight-line basis over 10 years with a residual value of P500,000. On January 1, 2021, the grant becomes fully repayable because of noncompliance with conditions. What is the depreciation for 2019? What is the depreciation for 2021? What is the carrying amount of the machinery at the end of 2021? What is the depreciation for 2022?
- Vincenzo Company spent P200,000 on research and development cost for an invention during 2021. On January 1, 2022, the invention was patented at a total cost of P450,000 with and estimated legal life of the patent was 20 years and the estimated useful life was 10 years. In January 2022, Vincenzo paid P250,000 for legal fees in a successful defense of the patent. What should be the amortization expense for 2022?On December 31, 2020, MECH COMPAY’S only building has a carrying amount of P1,350,000. The net recoverable amount of the building at that date was P950,000. The building still has a remaining life of 5 years. The net recoverable amount of the building on December 31, 2021 and December 31, 2022 were P820,000 and P855,000 respectively Impairment loss included in the profit or loss section of the 2020 comprehensive income statement Gain on impairment reversals included in the profit or loss section of the 2021 comprehensive income statement Gain on impairment reversals included in the profit or loss section of the 2022 comprehensive income statementOn january 1, 2022, Sarah Company purchased a machine for 8,500,000 and received a government grant of 1,000,000 toward the asset cost. The accounting policy is to treat the grant as a reduction in the cost of the asset. The machine is to be depreciated on a straight line basis over 5 years with a residual value of 500,000. On january 1, 2024, the grant became fully repayable because of noncompliance with conditions. 1. What amount should be reported as depreciation for 2022? a. 1,700,000 b. 1,600,000 c. 1,500,000 d. 1,400,000 2. What amount should be reported as depreciation for 2024? a. 1,400,000 b. 1,800,000 c. 1,600,000 d. 2,000,000
- Keshia Company purchased a machine for P3,000,000 on January 1, 2022. The entity received a government grant of P500,000 in respect to this asset. The policy is to depreciate the asset over five years on a straight line basis and to treat the grant as deferred income. On January 1, 2024, the grant became fully repayable because of noncompliance with conditions. What is the loss on repayment of grant in 2024? A. 500,000 В. 300,000 С. 200,000 D. 100,000On November 25, 2020, an explosion occurred at a Brit company plant causing extensive property damage to area buildings. By March 10, 2021, claims had been asserted against Brit Company. The management and counsel concluded that it is probable Brit Company will be responsible for damages, and that P3,500,000 would be a reasonable estimate of the liability. The entity's P10,000,000 comprehensive public liability policy has a P500,000 deductible clause. The financial statements for 2020 were issued on March 25, 2021. What amount of loss from lawsuit should be reported in the income statement for 2020? What amount of liability from lawsuit should be reported on December 31, 2020?7. Karen Company purchased a varnishing machine for P3,000,000 on January 1, 2019. 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. How much deferred income from the government grant will be presented in the statement of financial position for 2019?
- The Davis Corporation (DC) owns a building covered by the ISO Earthquake and Volcanic Eruption Endorsement With Percentage Deductible with a 10% deductible. The building is valued at $1.2 million and insured for $1 million, which satisfies the coinsurance requirement. An earthquake causes $250,000 damage to DC's building. How much will DC receive in compensation for this loss? Nothing $130,000 $150,000 $225,000Your business owns a piece of property that is valued at $200,000 and is insured. The insurance policy covering this property has an 80% coinsurance clause written into the contract. The amount of insurance purchased with this contract is $120,000. In the event that there was a $120,000 loss to the building due to a covered peril, what would be the amount of reimbursement you would receive from the insurance company due to this loss? (Assume that no deductible applies.) (Amount of Insurance Purchased/ Amount of Insurance Required) x Loss = Amount of Recovery %3D O $120,000 $90,000 O $96,000 $100,000 O None of the above1. On November 4, 2020, GT Corporation sells a piece of its equipment. GT Corporation had initially purchased the equipment for $350,000. The company had recorded $230,000 in depreciation for this piece of equipment as of the date of sale. If GT Corporation receive $150,000 cash when they sell the equipment, they will report a November 2020 Income Statement; if they instead receive $100,000 cash when they sell the equipment, they will on their report a a. $150,000 gain; $100,000 gain. b. $80,000 gain; $130,000 loss. c. $30,000 loss; $20,000 gain. d. $30,000 gain; $20,000 loss.