Information pertaining to Heroine Corporation’s property, plant and equipment for 2012 is presented below:

Account balances at January 1, 2012:

Debit Credit
Land P 150,000
Buildings 1,200,000
Accumulated depreciation – Buildings P263,100
Machinery and equipment 900,000
Accumulated depreciation – Machinery and equipment 250,000
Automotive equipment 115,000
Accumulated depreciation – Automotive equipment 84,600

Depreciation data:
Depreciation method Useful life

Buildings 150% declining-balance 25 years

Machinery and equipment Straight-line 10 years
Automotive equipment Sum-of-the-years’-digits 4 years
Leasehold improvements Straight-line -

The salvage values of the depreciable assets are immaterial. Depreciation is computed to the nearest month.

Transactions during 2012 and other information are as follows:

a. On January 2, 2012, Heroine purchased a new car for P20,000 cash and trade-in of a 2-year-old car with a cost
of P18,000 and book value of P5,400. The new car has a cash price of P24,000; the market value of the trade-
in is not known.

b. On April 1, 2012, a machine purchased for P23,000 on April 1, 2007, was destroyed by fire, Heroine recovered
P15,500 from its insurance company.

c. On May 1, 2012, costs of P168,000 were incurred to improve leased office premises. The leasehold
improvements have a useful life of 8 years. The related lease terminates on December 31, 2018.

d. On July 1, 2012, machinery and equipment were purchased at a total invoice cost of P280,000; additional
costs of P5,000 for freight and P25,000 for installation were incurred.

e. Heroine determined that the automotive equipment comprising the P115,000 balance at January 1, 2012,
would have been depreciated at a total amount of P18,000 for the year ended December 31, 2012.

Based on the information:

1. The adjusted balance of Machinery and Equipment (at cost) at December 31, 2012 is:
P 1,187,000

2. The adjusted balance of Automotive Equipment (at cost) at December 31, 2012 is:
P 121,000

3. The total adjusted balance of Accumulated Depreciation of Property and Equipment at December 31, 2012 is:
P 774,389

4. The total net gain (loss) from disposal of assets at December 31, 2012 is:
P 2,600

5. Which of the following is the best evidence of continuous ownership of property?

A. Examination of the deed.

B. Examination of rent receipts from lessees of the property.
C. Examination of the title policy.
D. Examination of canceled check in payment for the property.