Question No. 21 MC21 San Jose Realty Corporation acquired a tract of land onJanuary 1, 2020 for P20 million. Transaction costs paid bySan 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 makingprovision for public and common roads, incurring additionacost of P6,200,000. At December 31, 2021, the market valueper lot was P250,000.As of December 31, 2022, 380 lots were sold and the marketvalue of each lot had increased to P270,000. On this date, thecompany decided to transfer the remaining unsold lots intoinvestment property that is to be carried under the fair valuemodel.What amount of gain should San Jose Realty recognize as aresult of the transfer from inventory to investment property?P5,400,000P4,500,000P4,050,000P1,350,000.а.b.C.d.

An investment property is a piece of real estate purchased with the intention of earning a return on…

cost of P6,200,000. At December 31, 2021, the market value San Jose Realty Corporation acquired a tract of land on January 1, 2020 for P20 million. Transaction costs paid by San Jose relating to its acquisition amounted to P800,000. The tract of land was subdivided into 400 residential lots, naving 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. of December 31 3000

cost of P6,200,000. At December 31, 2021, the market value San Jose Realty Corporation acquired a tract of land on January 1, 2020 for P20 million. Transaction costs paid by San Jose relating to its acquisition amounted to P800,000. The tract of land was subdivided into 400 residential lots, naving 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. of December 31 3000

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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