How much should be reported as Land under PPE section of the financial position?
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In preparing the 2015 draft financial statement of BFF Company,
the Land account of P2,500,000 under PPE included the following items:
• P300,000 held for long term capital appreciation
• P450,000 held for sale in the ordinary course of business
• P175,000 grazing ground for cattles
• P240,000 held for currently undetermined future use
• P200,000 in which the management has made for immediate sale
How much should be reported as Land under PPE section of the financial position?
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- Glorious Company Limited owns land that it purchased at a cost of $400 million ("m") in 2017. The company chooses to use revaluation accounting to account for the land. The land's value at the end of the following years were as follows: 2017 - $450m; 2018 - $360m; 2019 - $385m; and 2020 $410m. Required: Prepare the journal entries to record the land using revaluation accounting from 2017 - 2020 using the following table: Year Journal Land Unrealized Gain on Revaluation Loss on Impairment Recovery of Impairment Loss $'m S'm $'m $'m 2017 Dr Cr 2018 Dr Cr 2019 Dr Cr 2020 Dr CrThe company's policy is to revalue its land at each year end and at 30 September 2017 it was valued at $53 million. Trial balance extracts at 30 September 2018 $'000 Land at cost on 30 September 2017 50,000 Plant and equipment at cost Accumulated depreciation at 30 September 2017 76,600 Plant 24,600 Capitalised development expenditure at 30 September 2017 20,000 Non-current assets - tangible: The land was acquired on the 30 September 2017. On 1 October 2017 an item of plant was disposed of for $2.5 million cash. The proceeds have been treated as sales revenue by the business. The plant is still included in the above trial balance figures at its cost of $8 million and accumulated depreciation of $4 million (to the date of disposal). All plant is depreciated at 20% per annum using the reducing balance method. Depreciation and amortisation of all non-current assets is charged to cost of sales. Non-current assets - intangible: In addition to the capitalised development expenditure…The draft balance sheet of Tere Corporation as of December 31, 2019 reported the net property, plant and equipment at P110,000,000. Details of the amount follow: Land at cost P10,000,000Building at cost P50,000,000Less accumulateddepreciation at 12/31/18 (20,000,000) 30,000,000Plant at cost 94,500,000Less accumulateddepreciation at 12/31/18 (24,500,000) 70,000,000 110,000,000The following matters are relevant:• On 30 June 2019, Tere terminated the production of one of its product lines. From this date, the plant used to manufacture the product has been actively marketed at an advertised price of P4.2 million which is considered realistic. Assume that this plant qualified as held for sale in accordance withPFRS 5. It is…
- Sisig Corp. has the following information in its notes to the financial statements:• Land held for long term capital appreciation- P1,000,000• Land held for a currently determined future use- P300,000• Property that is being constructed or developed for future use as an investment property- P1,500,000• Investment property being redeveloped- P2,000,000• Building owned and leased out under operating lease- P450,000• Owner-occupied property- P3,200,000• Owner-managed hotel- P2,300,000How much is the Investment Property to be presented in the statement of financial position? A. P4,950,000 B. P7,250,000 C. P2,500,000 D. P4,500,000Among the assets of Lucas Company on December 31, 2021 are the following:Land held for long-term capital appreciation 3,500,000Land held for a currently undetermined future use 5,700,000Building included in inventory 16,600,000Land held for long-term speculation 1,400,000Equipment leased out under an operating lease 500,000Building rented out under finance lease 10,900,000Land owned by the entity and leased out under an operating lease 7.800,000Building owned by the entity and leased out under operating lease 11,800,000Land held for future site 5,600,000Building that is currently vacant but is held to…Hawks Corporation’s Property, Plant and Equipment section of its statement of financial position as of December 31, 2019 included the following: Land P 400,000 Buildings 3,200,000 The following transactions occurred during 2020: Land site number 102 was acquired for P4,000,000. Additionally, to acquire the land the entity paid a P240,000 commission to a real estate agent. Costs of P60,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P20,000. A second tract of land (site number 103) with a building was acquired for P1,200,000. Based on reliable information at the time of acquisition, fair value of land is P800,000 and the building P400,000. Shortly after acquisition, the building was demolished at a cost of P120,000. A new building was constructed for P1,600,000 plus the following costs: Excavation fees P 44,000 Architectural design fees 32,000 Building permit…
- Hawks Corporation’s Property, Plant and Equipment section of its statement of financial position as of December 31, 2019 included the following: Land P 400,000 Buildings 3,200,000 The following transactions occurred during 2020: Land site number 102 was acquired for P4,000,000. Additionally, to acquire the land the entity paid a P240,000 commission to a real estate agent. Costs of P60,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P20,000. A second tract of land (site number 103) with a building was acquired for P1,200,000. Based on reliable information at the time of acquisition, fair value of land is P800,000 and the building P400,000. Shortly after acquisition, the building was demolished at a cost of P120,000. A new building was constructed for P1,600,000 plus the following costs: Excavation fees P 44,000 Architectural design fees 32,000 Building permit…The following information relates to Absolute Company for the year 2020: Determine the accounts and amounts taken to profit or loss relating to the investment property. Land Held as Investment Property (at cost) 5,000,000 Fair value at January 1, 2020 6,000,000 Fair value at December 31, 2020 6,800,000 Estimated disposal cost 300,000 Building Held as Investment Property Construction was completed at January 1, 2020 at a total cost of 20,000,000 Estimated useful life with no residual value 40 years Fair value at January 1, 2020 19,000,000 Fair value at December 31, 2020 20,000,000 Estimated disposal cost 500,000 Rent revenue recognized during 2020 3,000,000 Compensation paid to personnel for administrative and security 200,000 Real property taxes applicable to 2020 120,000 Costs of maintenance paid to an outsourced company 340,000Monroe Company is engaged in a number of research and development projects. Its accounting policy with regards to research and development is to capitalize expenditure as far as allowed by PAS 38 Intangible Assets. At June 30, 2024, the following balances existed in the company's accounting records: Project A : Development completed June 30, 2022. Total expenditure P200.000. Being amortized over five years on the straight-line basis in accordance with the company's standard policy. Balance at June 30, 2024: P120,000. Project B: A development project commenced July 1, 2019. Total expenditures in the years ended June 30, 2023 and June 30, 2024 totaled P175,000. During the year ended June 30, 2025, it became clear that a competitor had launched a superior product and the project was abandoned. Further development expenditure in the year ended June 30, 2025 amounted to P55,000. Project C: Development commenced October 1, 2020. Expenditures per year: Year ended June 30, 2025,…
- The following balances were extracted from the books of Billion Precision for the year ended 31 December 2020. Dr (RM) Cr (RM) Land 500000 Building 200000 Motor vehicles 120000 Plant and machinery 70000 Profit b/f as at 01.01.2020 237650 Capital 438000 Acc depreciation as at 1.1.2020 : Dr (RM) Cr (RM) Building 60 000 Motor vehicles 69250 Plant and machinery 40000 Returns 3600 4100 Revenue 800000 Purchases 400000 Discounts 5000 Carriage Inwards 7700 Opening Inventory 52000 Provision for bad debts 2000 Trade receivables / Trade payable 66000 43200 Advertising 18000 Staff training course 4000 Bad Debts 12500 Motor Expenses 27000 Rental 90000 Bank 7600 Wages & Salaries 126000 1701800 1701800 Additional information:i. The provision for bad debts should be 4% of trade receivables.ii. Depreciation is to be charged as follows:-Buildings 2% on cost.-Plant and machinery 20% on…Investment Property Determine the cost of the following items of investment acquired by Sasha Corporation during 2022; Land site for capital appreciation was acquired for P8,600,000. The company paid P430,000 commission to a real estate agent. Costs of P 135,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P 65,000. The cost of investment property is _____________ Land and building were acquired to be held for under operating leases. The company made a de payment of P4,000,000, issued 20,000 P200 par ordinary shares with a market price of P240 per share, and issued a three-year non-interest-bearing note for P6,000.000 note is payable in equal annual installments of P2,000,000 at the end of each year from the date of purchase. The prevailing interest rate for similar notes is 10%. 30% of the purchase price is allocated to the land. Investment property is recorded at __________Determine the cost of the following items of investment acquired by Sasha Corporation during 2022;a. Land site for capital appreciation was acquired for P8,600,000. The company paid P 430,000 commission to a real estate agent. Costs of P 135,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P 65,000. The cost of investment property is _____________b. Land and building were acquired to be held for under operating leases. The company made a de payment of P4,000,000, issued 20,000 P200 par ordinary shares with market price of P240 per share and issued three year non-interest bearing note for P6,000.000 note is payable in equal annual instalments of P2,000,000 at the end of each year from the date of purchase. Prevailing interest rate for similar notes is 10%. 30% of the purchase price is allocated to the land. Investment property is recorded at __________