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. It was renovated before use 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 Land at the end of 2023?

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. It was renovated before use 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 Land at the end of 2023?

Name: Beginning of 2021, a land with a huge complex buildingwas purchased a
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Description: Beginning of 2021, a land with a huge complex buildingwas purchased at P 50,000,000. It was then decided that25% of the complex will be used for cockpit arena whilethe rest of the spaces will be for rental. 80% of the totalcost was allocated to the

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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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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