At the beginning of the year 2019, Trunk Company has an investmentproperty acquired at a cost of P1,700,000 that is to be accounted underthe cost model. Depreciation of 10% is recognized annually and periodiccontinuing repair costs of P3,500 per year as well as property tax of P2,700are incurred by the company on an annual basis. What should be thecarrying value of the investment at the end of the year 2019? *

After initial recognition, investment property is accounted for in accordance with the cost model -…

Answered: are incurred by the company on an…

are incurred by the company on an annual basis. What should be the carrying value of the investment at the end of the year 2019? *

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 6MCQ: Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense...

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At the beginning of the year 2019, Trunk Company has an investment property acquired at a cost of P1,700,000 that is to be accounted under the cost model. Depreciation of 10% is recognized annually and periodic continuing repair costs of P3,500 per year as well as property tax of P2,700 are incurred by the company on an annual basis. What should be the carrying value of the investment at the end of the year 2019? On April 1, 2019, Red Company purchased as a trading security a P1,000,000 face value 8% bond for P920,000 plus brokerage of P12,000 and accrued interest. The bonds mature on January 1, 2023 and pay interest annually on January 1. On December 31, 2019, the bonds had a market value of P965,000. For the year ending December 31, 2019 income statement, what amount should Red report as Unrealized gain or loss from trading securities? (Do not include any parenthesis, just amount without period or comma) Dahlia Company purchased a P2,000,000 12% face value bonds, 10…
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On 1 November 2019, Mushe Limited acquired a machine for N$ 100 000 formanufacturing purposes. The machine was put into use immediately. Payment of thepurchase price will take place on 15 th October 2020. Depreciation is written off at20% per annum according to the straight-line method. Wear and tear are allowed at10% per annum on the reducing balance method and is weighted on a timeproportional basis. The tax rate is 29%. The company reporting date is 31 December 1 November 2019 N$ 1= USD 1.3031 December 2019 N$ 1 = USD 1.2815 October 2020 N$ 1 = USD 1.05 RequiredShow the journal entries for 2019 and 2020 so as to comply with the requirements ofInternational Financial Reporting Standards (IFRS). Journal narrations are notrequired. (Ignore current tax)
At the beginning of the year 2019. Itlog Company has an investment property acquired at a cost of $ 2,000,000. On December 31, 2019, the fair value was $2,200,000 and on December 31, 2020, the fair value was $1,950,000. The property had a useful life of 25 years. Under the cost method and fair value method, what is the carrying value of the investment that should be carried in the balance sheet as of December 31, 2020?
PREPARE AN AMORTIZATION TABLE AND FIND HOW MUCH IS THE NET PROCEEDS FOR THE FOLLOWING CASES: Case 1: On December 31, 2019 Triangle company purchase a property by issuing 8% promissory note with face amount of 5,000,000 to yield 10% interest semi annual for 10 years.
On January 1, 2020, ERNSTCo. finished constructing an edifice that will be accounted for as an investment property using the cost model.Total construction cost was P35,000,000. The entity estimates that the asset will be useful for 40 years. Continuing repairs on the building amount to P60,000 every year, and annual real property tax to be paid by the company is P110,000. Determine the following: 1.Annual expenses incurred by ERNSTin relation to its investment property. 2.Carrying amountof the asset at the end of 2022.
Under the accrual basis rental income of EL Company for the calendar year 2020 is P600,000. Additional information regarding rental income are presented below: Unearned rental income, January 1, 2020 P50,000 Unearned rental income, December 31, 2020 75,000 Accrued rental income, January 1, 2020 30,000 Accrued rental income, December 31, 2020 40,000 Under the cash basis, how much rental income should be reported by EL Company in year 2020? Group of answer choices d. P655,000 c. P625,000 b. P615,000 a. P585,000
PREPARE AN AMORTIZATION TABLE AND FIND HOW MUCH IS THE NET PROCEEDS FOR THE FOLLOWING CASES: Case 2: On January 1, 2020 Square company purchase a property by issuing 15% promissory note with face amount of 5,000,000 to yield 12% interest and principal payable annually for 5 years.
A has an investment property acquired at a cost of P2,000,000. Depreciation is estimated to be P50,000 annually and a periodic repair costs of P15,000 per year as well as property tax of P5,000 are incurred by the company on an annual basis. The fair value of the investment property before taxes and repairs amounts to P2,100,000 at year end. What is the carrying value of A's investment property on December 31, 2021 considering that the fair value model is used?
You have been recently appointed the junior accountant of Peachy Limited. The following trial balance has been extracted from the records of Peachy Limited as at 31 December 2020. €’000 €'000 Ordinary shares of €1 each 150,000 50,000 50,000 80,000 129,010 Share Premium 5% preference shares 7% loan notes Retained earnings Premises 290,000 87,000 40,000 Motor vehicles at cost Equipment at cost Accumulated depreciation – motor vehicles Accumulated depreciation - Equipment Inventory at 1.1.20 Payables Receivables 17,000 8,000 48,000 12,750 24,400 Bank 11,740 Revenue 327,000 Purchases 188,000 34,000 Wages Administrative expenses Selling & distribution costs 15,320 12,470 70,230 2,600 Directors Salaries Loan note interest paid 823,760 823,760 Additional Information: 1. The company uses the revaluation model for valuing its premises. The premises is included in the trial balance at its fair value as at 31 December 2019. Both motor vehicles and equipment are included in the trial balance at…
On January 1, 2019, the Business Info Company had capitalized costs of P6,000,000 for a new computer software product with an estimated useful life of 4 years. Sales for the software product during were P2,400,000 in 2019 and P4,200,000 in 2020. The total sales of the software over the economic life are expected to be P12,000,000. Question: What amount of amortization of computer software should Business Info Company record for the year 2020? а. РО P1,500,000 P1,800,000 P2,100,000 b. C. d.
In 2018 an asset was purchased for $8,000,000. It was not eligible for initial allowance. annualallowance rate was 10%. The asset was sold in 2022 for $8,500,000. Capital allowance is on the straightlinebasis.The balancing adjustment is:a. $4,000,000b. $3,200,000c. $3,700,000d. $4,500,000