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?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 5o
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?
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 5o 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?
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