As of December 31, 2022, 380 lots were sold and the market value of each lot had increased to P270,000. On this date, the company decided to transfer the remaining unsold lots into investment property that is to be carried under the fair value model. What amount of gain should San Jose Realty recognize as a result of the transfer from inventory to investment property? P5,400,000 P4,500,000 P4,050,000 P1,350,000 a. b. C. d.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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San Jose Realty Corporation acquired a tract of land on
January 1, 2020 for P20 million. Transaction costs paid
San Jose relating to its acquisition amounted to P800.000
The tract of land was subdivided into 400 residential lots
having an area of 200 square meters each, after making
provision for public and common roads, incurring additional
cost of P6,200,000. At December 31, 2021, the market value
per lot was P250,000.
Transcribed Image Text:San Jose Realty Corporation acquired a tract of land on January 1, 2020 for P20 million. Transaction costs paid San Jose relating to its acquisition amounted to P800.000 The tract of land was subdivided into 400 residential lots having an area of 200 square meters each, after making provision for public and common roads, incurring additional cost of P6,200,000. At December 31, 2021, the market value per lot was P250,000.
As of December 31, 2022, 380 lots were sold and the market
value of each lot had increased to P270,000. On this date, the
company decided to transfer the remaining unsold lots into
investment property that is to be carried under the fair value
model.
What amount of gain should San Jose Realty recognize as a
result of the transfer from inventory to investment property?
P5,400,000
P4,500,000
P4,050,000
P1,350,000
a.
b.
с.
d.
Transcribed Image Text:As of December 31, 2022, 380 lots were sold and the market value of each lot had increased to P270,000. On this date, the company decided to transfer the remaining unsold lots into investment property that is to be carried under the fair value model. What amount of gain should San Jose Realty recognize as a result of the transfer from inventory to investment property? P5,400,000 P4,500,000 P4,050,000 P1,350,000 a. b. с. d.
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