Beginning of 2021, a land with a huge complex building was purchased at P 50,000,000. It was then decided that 25% of the complex will be used for cockpit arena while the rest of the spaces will be for rental. 80% of the total cost was allocated to the land and that its total life is 5o years and this was purchased by the entity after 20 years of use by the previous owner. Additional Costs incurred
Beginning of 2021, a land with a huge complex building was purchased at P 50,000,000. It was then decided that 25% of the complex will be used for cockpit arena while the rest of the spaces will be for rental. 80% of the total cost was allocated to the land and that its total life is 5o years and this was purchased by the entity after 20 years of use by the previous owner. Additional Costs incurred
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Beginning of 2021, a land with a huge complex building
was purchased at P 50,000,000. It was then decided that
25% of the complex will be used for cockpit arena while
the rest of the spaces will be for rental. 80% of the total
cost was allocated to the land and that its total life is 50
years
and this was purchased by the entity after 20 years
of use by the previous owner. Additional Costs incurred
before in addition to the purchase price is at P
10,000,000. Its ending fair values are 110% and 112% of
the original cost for 2021 and 2022, respectively. If the
property is subsequently accounted at cost model and
depreciated on a straight line method, what will be the
carrying value of the Investment Property at the end of
2022?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5850e45f-da83-487f-9561-7fcd831a4ee5%2Fbd9e1715-7cf6-45dd-97a1-3f965c0ff0e3%2Fycp9p8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Beginning of 2021, a land with a huge complex building
was purchased at P 50,000,000. It was then decided that
25% of the complex will be used for cockpit arena while
the rest of the spaces will be for rental. 80% of the total
cost was allocated to the land and that its total life is 50
years
and this was purchased by the entity after 20 years
of use by the previous owner. Additional Costs incurred
before in addition to the purchase price is at P
10,000,000. Its ending fair values are 110% and 112% of
the original cost for 2021 and 2022, respectively. If the
property is subsequently accounted at cost model and
depreciated on a straight line method, what will be the
carrying value of the Investment Property at the end of
2022?
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