30. A building previously occupied by Grand Company with a cost of P10 million and an accumulated depreciation of P5.5 million is reclassified as investment property. At the time of reclassification, the building has a fair value of P5 million. Using the fair value model, upon reclassification to investment property, at what amount should Grand record the investment property and what amount of gain is recognized in profit or loss, respectively? P4.5 million and P500,000 P5 million and PO P5 million and P500,000 P4.5 million and PO

30. A building previously occupied by Grand Company with a cost of P10 million and an accumulated depreciation of P5.5 million is reclassified as investment property. At the time of reclassification, the building has a fair value of P5 million. Using the fair value model, upon reclassification to investment property, at what amount should Grand record the investment property and what amount of gain is recognized in profit or loss, respectively? P4.5 million and P500,000 P5 million and PO P5 million and P500,000 P4.5 million and PO

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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If a company exchanges an asset with a book value of $260,000, an original cost of $500,000, and a fair value of $300,000 plus cash of $100,000 for a new asset, what is the gain or loss recognized on the transaction?
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Please show your solution.
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