A. Using the cost model, what is the depreciation expense for the year 2020? Note that asset was acquired on Sept. 30. B. Using the cost model, what is the carrying value of the investment property on Dec. 31, 2021? C. Using the fair value model, what is the carrying value on Dec. 31, 2020? D. Using the fair value model, what is the gain or (loss) from change in fair value?
A. Using the cost model, what is the depreciation expense for the year 2020? Note that asset was acquired on Sept. 30. B. Using the cost model, what is the carrying value of the investment property on Dec. 31, 2021? C. Using the fair value model, what is the carrying value on Dec. 31, 2020? D. Using the fair value model, what is the gain or (loss) from change in fair value?
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 8PA: Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the...
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Question
On Sept 30, 2020, ABC acquired a building to earn rent through
operating leases. The investment property was initially measured at
P20,000,000. It has an estimated useful life of 25 years and a
residual value of P400,000. It has a fair value of P22,000,000 and
P23,000,000 as of the end of 2020 and 2021 respectively.
A. Using the cost model, what is the
the year 2020? Note that asset was acquired on Sept. 30.
B. Using the cost model, what is the carrying value of the
investment property on Dec. 31, 2021?
C. Using the fair value model, what is the carrying value on
Dec. 31, 2020?
D. Using the fair value model, what is the gain or (loss) from
change in fair value?
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