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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On 13 February 20X5, Reekwa Company purchased an office tower for $31.1 million. The office is a mixed-use property: it is owner- occupied and includes rental units. The fair value of the building on 31 December 20X6 is $31.5 million and $28.0 million on 31 December 20X8. At the time of purchase, the office tower has a remaining useful life of 25 years, and is amortized on a straight-line basis. Required: 1. Should the office tower be considered property, plant, and equipment or investment property? Property, plant, and equipment Investment property 2. Assume the property is determined to be PPE, and management applies the elimination method for the revaluation model. Prepare the required journal entries for the revaluation of the office tower in 20X6 and 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 Date 31 December 20X6 No journal entry required 2 31 December 20X8 Accounts payable General Journal Debit × ×…
XYZ Company had the following transactions pertaining to its new office building: Purchase price of land -P1,200.000; Legal fees for contracts to purchase land -P130,000; Architect's fee - P255,000: Demolition of old building on site -P310.000; Sale of scrap from old building -P71,000; Construction cost of new building (fully completed) -P2.450,000: Fire insurance policy on the newly constructed building for the whole year starting on the day it was completed -P250.000. At what amount should the building be shown in XYZ statement of financial position of?
Nathan Jacob’s Company paid $450,000 to acquire land, building, and equipment. At the time of the acquisition, Nathan Jacob's $15,000 to have the property appraised. The following values were determined from the appraisal: land, $125,000; building, $235,000; and equipment, $150,000. Required: 1. What cost should Nathan Jacob’s assign to the land, buildings, and equipment, respectively? 2. Provide the journal entry to record the acquisition on the books of Nathan Jacob’s.
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