1. An entity acquired a building for the purpose of leasing it on Jan 1, 2021 for P50 M. At that date the building had a useful life of 40 years. At Dec 31, 2021 the fair value of the building was P51 M. If the entity chooses the fair value model, the entity should * a.recognize depreciation of P1.25 M in its 2021 profit or loss b.recognize the building in its Dec 31, 2021 financial position statement at P48.75 M c.recognize gain of P1 M in its 2021 profit or loss d.none of the above
1. An entity acquired a building for the purpose of leasing it on Jan 1, 2021 for P50 M. At that date the building had a useful life of 40 years. At Dec 31, 2021 the fair value of the building was P51 M. If the entity chooses the fair value model, the entity should * a.recognize depreciation of P1.25 M in its 2021 profit or loss b.recognize the building in its Dec 31, 2021 financial position statement at P48.75 M c.recognize gain of P1 M in its 2021 profit or loss d.none of the above
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
1. An entity acquired a building for the purpose of leasing it on Jan 1, 2021 for P50 M. At that date the building had a useful life of 40 years. At Dec 31, 2021 the fair value of the building was P51 M. If the entity chooses the fair value model, the entity should *
a.recognize depreciation of P1.25 M in its 2021 profit or loss
b.recognize the building in its Dec 31, 2021 financial position statement at P48.75 M
c.recognize gain of P1 M in its 2021 profit or loss
d.none of the above
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education