PERIODIC REGULAR Co. acquired a building on January 1, 20x1 for a total cost of ₱24,000,000 and classified it as investment property. PERIODIC Co. uses the fair value model for its investment property. On January 1, 20x5, when the carrying amount of the building is ₱16,000,000, the elevator in the building was replaced for a total cost of ₱3,200,000. It is impracticable to determine the fair value of the replaced part. The fair value of the building on December 31, 20x5 is ₱17,200,000. How much is the loss recognized during the year? * a. 3,200,000 b. 2,000,000 c. no loss d. indeterminable

PERIODIC REGULAR Co. acquired a building on January 1, 20x1 for a total cost of ₱24,000,000 and classified it as investment property. PERIODIC Co. uses the fair value model for its investment property. On January 1, 20x5, when the carrying amount of the building is ₱16,000,000, the elevator in the building was replaced for a total cost of ₱3,200,000. It is impracticable to determine the fair value of the replaced part. The fair value of the building on December 31, 20x5 is ₱17,200,000. How much is the loss recognized during the year? * a. 3,200,000 b. 2,000,000 c. no loss d. indeterminable

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter13: Property Transactions: Determination Of Gain Or Loss, Basis Considerations, And Nonta Xable Exchanges

Section: Chapter Questions

Problem 85P

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PERIODIC REGULAR Co. acquired a building on January 1, 20x1 for a total cost of ₱24,000,000 and classified it as investment property. PERIODIC Co. uses the fair value model for its investment property. On January 1, 20x5, when the carrying amount of the building is ₱16,000,000, the elevator in the building was replaced for a total cost of ₱3,200,000. It is impracticable to determine the fair value of the replaced part. The fair value of the building on December 31, 20x5 is ₱17,200,000. How much is the loss recognized during the year?
1. PERIODIC REGULAR Co. acquired a building on January 1, 20x1 for a total cost of ₱24,000,000and classified it as investment property. PERIODIC Co. uses the fair value model for its investment property. On January 1, 20x5, when the carrying amount of the building is ₱16,000,000, the elevator in the building was replaced for a total cost of ₱3,200,000. It is impracticable to determine the fair value of the replaced part. The fair value of the building on December 31, 20x5 is ₱17,200,000. How much is the loss recognized during the year? please provide solution
Please provide solutions. Thank you. 1. PERIODIC REGULAR Co. acquired a building on January 1, 20x1 for a total cost of ₱24,000,000 and classified it as investment property. PERIODIC Co. uses the fair value model for its investment property. On January 1, 20x5, when the carrying amount of the building is ₱16,000,000, the elevator in the building was replaced for a total cost of ₱3,200,000. It is impracticable to determine the fair value of the replaced part. The fair value of the building on December 31, 20x5 is ₱17,200,000. How much is the loss recognized during the year? a. 3,200,000 b. 2,000,000 c. no loss d. indeterminable
On April 1, 20x1, ESCULENT EDIBLE Co. purchased land and building by paying ₱40,000,000 and assuming a mortgage of ₱8,000,000. The land and building have appraised values of ₱20,000,000 and ₱40,000,000, respectively. The building will be used by ESCULENT Co. as its new office. Additional costs relating to the purchase include the following: Legal cost of conveying and registering title to land ₱32,000 Payment to tenants to vacate premises 36,000 Option paid on the land and building 24,000 Option paid on similar land and building not acquired 12,000 Broker's fee on the land and building 60,000 Unpaid real estate taxes prior to April 1, 20x1 assumed by ESCULENT Co. - assessed on land 120,000 Real estate taxes after April 1, 20x1 80,000 Repairs and renovation costs before the building is occupied 160,000 Repair costs after the building is occupied 200,000 * How much is the cost of the land? a. 16,192,000 b. 17,292,000 c. 15,492,000 d. 14,592,000 * How much is the cost of the building?…
Please provide solution 1. On December 31, 20x1, DECAPITATE BEHEAD Co. decided to lease out under operating lease one of its buildings that was previously used as office space. The building has an original cost of ₱12,000,000 and accumulated depreciation of ₱8,000,000 as of January 1, 20x1. Annual depreciation is ₱400,000. DECAPITATE Co. uses the fair value model for investment property. The fair value of the building on December 31, 20x1 is ₱6,000,000. The entry to record the transfer of the building to investment property includes a: a. credit to gain on reclassification for ₱2,000,000. b. credit to revaluation surplus for ₱2,000,000. c. debit to building for ₱12,000,000. d. credit to revaluation surplus for ₱2,400,000.
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Entity A acquires a building for ₱1,000,000. The building is to be leased out under various operating leases. The building has an estimated useful life of 10 years and zero residual value. Entity A uses the cost model for its property, plant and equipment and the fair value model for its investment property. At the end of Year 1, the building is assessed to have a fair value of ₱1,080,000. How much should Entity A recognize in profit or loss in relation to the building? a. 80,000 gain on change in fair value 100,000 depreciation 180,000 gain on change in fair value b and c
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On December 31, 2021, an entity has a building with cost of Rp500 million and accumulated depreciation of Rp250 million. The entity uses revaluation model on the building. The entity made a fair value adjustment to its building and recognized loss of Rp100 million on December 31, 2021. On January 5, 2022, the entity decided to lease out that owner-occupied building and transferred it to investment property using the fair value model. At the time of transfer, the fair value of the building was Rp280 million. The gain/loss recognized in profit or loss on the transfer will be a. gain of Rp130 million. O b. gain of Rp30 million. O .gain of Rp100 million. O d. loss of Rp130 million.
Winona Rider Company has an investment property acquired four years ago at a total cost of P 1,000,000. The investment property is measured under the cost model and depreciated using the straight line method over an estimated useful life of 10 years with no residual value. The current fair value of the property is P 400,000. If WInona Rider decides to transfer the investment property to owner-occupied property, the transfer will most likely results to __________in Winona Rider's statement of profit or loss? Select two (2). Choose the amount of loss and the type of loss that shall be recognized on the above transaction. Winona Rider Company has an investment property acquired four years ago at a total cost of P 1,000,000. The investment property is measured under the cost model and depreciated using the straight line method over an estimated useful life of 10 years with no residual value. The current fair value of the property is P 400,000. If WInona Rider decides to transfer the…
Ingrid company acquired a building on January 1, 2017 for P4,500,000. At that date the building had a useful life of 30 years. On December 31, 2017 the fair value of the building was P4,800,000 and on December 31, 2018, the fair value is P4,900,000. The building was classified as an investment property and accounted for under the cost model. What amount should be carried in the statement of financial position as investment property?
Salvador Company is committed to a plan to sell its headquarters building and has initiated actions to locate a buyer. As of this date, the building has a carrying amount of P5,000,000, a fair value of P6,000,000 and estimated costs to sell of P200,000. 3) How should Salvador classify the headquarters building? A. Included under property, plant and equipment at P5,000,000. B. Included under property, plant and equipment at P5,800,000. C. Classified as held for sale at P5,000,000. D. Classified as held for sale at P5,800,000. 4) Salvador Company will continue to use the building until construction of a new headquarters is completed. How should Salvador Company classify the headquarters building? A. Included under property, plant and equipment at P5,000,000. B. Included under property, plant and equipment at P5,800,000. C. Classified as held for sale at P5,000,000. D. Classified as held for sale at P5,800,000.