6. On January 1 of year 1, XYZ Company is granted a tract of land in Davao Oriental by the current administration of the Philippines. The fair value of the land is P40,000,000. XYZ Company is required by the grant to construct a chemical research facility and employ personal residing within the locality. It is estimated that the cost of the facility will be P45,000,000 with 10 years of useful life. Beginning of year 2, the facility is ready for its intended usage. XYZ Company sets up the grant as a liability. Determine the balance of the liability at the end of year 4
6. On January 1 of year 1, XYZ Company is granted a tract of land in Davao Oriental by the current administration of the Philippines. The fair value of the land is P40,000,000. XYZ Company is required by the grant to construct a chemical research facility and employ personal residing within the locality. It is estimated that the cost of the facility will be P45,000,000 with 10 years of useful life. Beginning of year 2, the facility is ready for its intended usage. XYZ Company sets up the grant as a liability. Determine the balance of the liability at the end of year 4
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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6. On January 1 of year 1, XYZ Company is granted a tract of land in Davao Oriental by the current administration of the Philippines. The fair value of the land is P40,000,000. XYZ Company is required by the grant to construct a chemical research facility and employ personal residing within the locality. It is estimated that the cost of the facility will be P45,000,000 with 10 years of useful life. Beginning of year 2, the facility is ready for its intended usage. XYZ Company sets up the grant as a liability. Determine the balance of the liability at the end of year 4.
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