8/14/2019 Audit of PPE.doc
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Information pertaining to Heroine Corporations property, plant
and equipment for 2012 is presented below:
Account balances at anuary 1, 2012: Debit Credit
!and " 1#0,000$uildings 1,200,000Accumulated depreciation %
$uildings "2&',100
(ac)inery and equipment *00,000Accumulated depreciation %
(ac)inery and equipment 2#0,000Automoti+e equipment
11#,000Accumulated depreciation % Automoti+e equipment
-,&00
.epreciation data:Depreciation method Useful life
$uildings 1#0/ decliningbalance 2# years(ac)inery and equipment
traig)tline 10 yearsAutomoti+e equipment umoft)eyearsdigits -
years!ease)old impro+ements traig)tline
)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 2, 2012, Heroine purc)ased a new car for "20,000
cas) and tradein of a 2yearold car wit) a costof "1,000 and boo5
+alue of "#,-003 )e new car )as a cas) price of "2-,0006 t)e mar5et
+alue of t)e tradein is not 5nown3
b3 4n April 1, 2012, a mac)ine purc)ased for "2',000 on April 1,
2007, was destroyed by fire, Heroine reco+ered"1#,#00 from its
insurance company3
c3 4n (ay 1, 2012, costs of "1&,000 were incurred to impro+e
leased office premises3 )e lease)oldimpro+ements )a+e a useful life
of years3 )e related lease terminates on .ecember '1, 2013
d3 4n uly 1, 2012, mac)inery and equipment were purc)ased at a
total in+oice cost of "20,0006 additionalcosts of "#,000 for
freig)t and "2#,000 for installation were incurred3
e3 Heroine determined t)at t)e automoti+e equipment comprising
t)e "11#,000 balance at anuary 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 balance of (ac)inery and 9quipment at cost; at
.ecember '1, 2012 is:" 1,17,000
23 )e ad8usted balance of Automoti+e 9quipment at cost; at
.ecember '1, 2012 is:" 121,000
'3 )e total ad8usted balance of Accumulated .epreciation of
"roperty and 9quipment at .ecember '1, 2012 is:" 77-,'*
-3 )e total net gain loss; from disposal of assets at .ecember
'1, 2012 is:" 2,&00
#3 amination of t)e deed3B.9>amination of rent receipts from
lessees of t)e property3C3 9>amination of t)e title policy3.3
9>amination of canceled c)ec5 in payment for t)e property3
