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4. Investment property is initially measured at cost, including transaction costs. Such cost includes a. Start-up costs b. Abnormal waste c. Property transfer taxes d. Initial operating losses

4. Investment property is initially measured at cost, including transaction costs. Such cost includes a. Start-up costs b. Abnormal waste c. Property transfer taxes d. Initial operating losses

FINANCIAL ACCOUNTING
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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ACCOUNTING FOR INVESTMENT PROPERTY.PROBLEM 1. PLEASE ANSWER  AND SHOW SOLUTION

Darell Co.'s diverse activities. how to classify the following items in the statement of financial position duc to Darell Company. Darell Co.'s accountant, the hot and sexy Ms. Munda, is unsure The following data was extracted during the financial statement preparation of PROBLEM viuJsiJICUtion Issues Darell Co.'s diverse activities Item 1) Factory which due to a decline in activity is no longer required and is now being held for sale in accordance Amount P 500,000 with PFRS 5. 2) Farming land was purchased for its investment potential. Planning permission has not been obtained 800,000 for building constructions of any kind. | 3) A factory is in the process of being constructed on behalf of the government. 1,260,000 4) A building being constructed on behalf of Marky Company 1,000,000 5) A new office building used by one of its subsidiaries as its head office which was purchased specifically in the 1,200,000 center of Makati City in order to exploit its capital gains potential. A property that is in the process of construction for 6) sale 950,000 A property intended for sale in the ordinary course of 7) business 450,000 8) | Owner-occupied properties 1,600,000 760,000 9) Buildings occupied by employees, including Ms. Munda the accountant. The employees pays rent on the building they occupied 10) |A building occupied by employees, the employees do not pay market rent on the building they occupied. 11) | A building that is leased to a third party under a finance lease 240,000 1,110,000 12) | A building that is held under mixed use; half of it is owner-occupied and the other half is to earn rentals 13) 1,720,000 13) | A property wherein significant ancillary services are provided to occupants 14) Land and building leased to a subsidiary 15) | A building leased to an associate under an operating lease 16) 960,000 2,100,000 1,620,000 530,000 A new machine leased to another associate under an operating lease 4 machine that is leased by the. company under 420,000
Transcribed Image Text:Darell Co.'s diverse activities. how to classify the following items in the statement of financial position duc to Darell Company. Darell Co.'s accountant, the hot and sexy Ms. Munda, is unsure The following data was extracted during the financial statement preparation of PROBLEM viuJsiJICUtion Issues Darell Co.'s diverse activities Item 1) Factory which due to a decline in activity is no longer required and is now being held for sale in accordance Amount P 500,000 with PFRS 5. 2) Farming land was purchased for its investment potential. Planning permission has not been obtained 800,000 for building constructions of any kind. | 3) A factory is in the process of being constructed on behalf of the government. 1,260,000 4) A building being constructed on behalf of Marky Company 1,000,000 5) A new office building used by one of its subsidiaries as its head office which was purchased specifically in the 1,200,000 center of Makati City in order to exploit its capital gains potential. A property that is in the process of construction for 6) sale 950,000 A property intended for sale in the ordinary course of 7) business 450,000 8) | Owner-occupied properties 1,600,000 760,000 9) Buildings occupied by employees, including Ms. Munda the accountant. The employees pays rent on the building they occupied 10) |A building occupied by employees, the employees do not pay market rent on the building they occupied. 11) | A building that is leased to a third party under a finance lease 240,000 1,110,000 12) | A building that is held under mixed use; half of it is owner-occupied and the other half is to earn rentals 13) 1,720,000 13) | A property wherein significant ancillary services are provided to occupants 14) Land and building leased to a subsidiary 15) | A building leased to an associate under an operating lease 16) 960,000 2,100,000 1,620,000 530,000 A new machine leased to another associate under an operating lease 4 machine that is leased by the. company under 420,000
18) A building that is being constructed for future use as 870,000 administration building. Questions: Based on the above and the result of your audit, determine the amounts to be reported in the consolidated financial statement of Darell Company and its subsidiaries: 1. Investment pronerb b. B10 500000 4. Investment property is initially measured at cost, including transaction costs. Such cost includes a. Start-up costs b. Abnormal waste c. Property transfer taxes d. Initial operating losses
Transcribed Image Text:18) A building that is being constructed for future use as 870,000 administration building. Questions: Based on the above and the result of your audit, determine the amounts to be reported in the consolidated financial statement of Darell Company and its subsidiaries: 1. Investment pronerb b. B10 500000 4. Investment property is initially measured at cost, including transaction costs. Such cost includes a. Start-up costs b. Abnormal waste c. Property transfer taxes d. Initial operating losses
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