Dangerous Company’s investment property has a carrying amount of P800,000 before any year-end adjustment. The property has a remaining useful life of 10 years. Dangerous Company uses the fair value model for its investment property. The property has a fair value of P700,000 at the end of the reporting period. The year-end adjusting entry would most likely include a. a debit to depreciation expense of P80,000 b. a debit to impairment loss of P100,000 c. a credit to unrealized loss of P100,000 d. a debit to unrealized loss of P100,000

Dangerous Company’s investment property has a carrying amount of P800,000 before any year-end adjustment. The property has a remaining useful life of 10 years. Dangerous Company uses the fair value model for its investment property. The property has a fair value of P700,000 at the end of the reporting period. The year-end adjusting entry would most likely include a. a debit to depreciation expense of P80,000 b. a debit to impairment loss of P100,000 c. a credit to unrealized loss of P100,000 d. a debit to unrealized loss of P100,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 11E: On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated...

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On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
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A has an investment property acquired at a cost of P2,000,000. Depreciation is estimated to be P50,000 annually and a periodic repair costs of P15,000 per year as well as property tax of P5,000 are incurred by the company on an annual basis. The fair value of the investment property before taxes and repairs amounts to P2,100,000 at year end. What is the carrying value of A's investment property on December 31, 2021 considering that the fair value model is used?
This question related with MFRS 116
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