37. Iron Company has the following property items atDecember 31, 2021:Particulars / Acquisition (CV) / FV 12/31/21Land which at the date of acquisition is notintended for any specific use in the future -P1,000,000 / P1,800,000Land held for future plant site - 2,000,000 /2,600,000Building in process of construction intended to beleased under operating lease - 8,000,000 /8,000,000Building being used by the entity for its operations- 2,5000,000 / 3,000,000Equipment being leased under operating lease -1,500,000 / 1,050,000Land and Building acquired under finance leasesbeing used by the entity as its general andadministrative headquarter - 9,200,000 / 9,900,000Assuming that the company adopted IAS 40,Investment Property using the Fair value model,what is the correct total of the investment propertyreported at December 31, 2021?P1,800,000P9,800,000P10,850,000P19,700,000

As per IAS – 40, an investment property will be a land or a building or part of a building or both…

Iron Company has the following property items at December 31, 2021: Particulars / Acquisition (CV) / FV 12/31/21 Land which at the date of acquisition is not intended for any specific use in the future - P1,000,000 / P1,800,000 Land held for future plant site - 2,000,000 / 2,600,000 Building in process of construction intended to be leased under operating lease - 8,000,000 /

Iron Company has the following property items at December 31, 2021: Particulars / Acquisition (CV) / FV 12/31/21 Land which at the date of acquisition is not intended for any specific use in the future - P1,000,000 / P1,800,000 Land held for future plant site - 2,000,000 / 2,600,000 Building in process of construction intended to be leased under operating lease - 8,000,000 /

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: You Company owns land and building classified as investment property . The land and building is…

A: When company owns land and building classified as investment property and company uses the fair…

Q: Moregoodwill Ltd acquired all the assets and liabilities of Lessgoodwill Ltd on 30 June 2021. The…

A: Goodwill will be calculated by subtracting the fair value of net assets identified from the…

Q: Impairment of a CGU ✰✰ Bow Ltd reported the following assets in its statement of financial position…

A: The first step is to calculate the carrying amount of the assets. The carrying amount is the…

Q: 1. Prepare any necessary journal entries associated with the three classes of assets for the year…

A: Hey there since you have posted multiple questions, we can answer only first question, please…

Q: 16. In 2018, Port Company purchased the working interest of an unproved lease for $100,000. In 2019,…

A: The journal entry is very important for the accounting process because the business transaction is…

Q: Required: Record the abandonment entry assuming abandonment does not significantly affect the…

A: AccountDebit ($)Credit ($)Lease A: unproved property75,000-Lease B: proved property50,000-Wells and…

Q: ember 31, 2019, certain accounts included in the property, plant, and equipment section of Oriole…

A: Property, plant, and equipment consists of land, buildings, leasehold improvements, and equipment,…

Q: Assuming that there is an active market for the computer software purchased from Software Inc. and…

A: a. Patent: The patent was purchased for P4,000,000 with an estimated useful life of 10 years.…

Q: At December 31, 2019, certain accounts included in the property, plant, and equipment section of…

A: (a) 1. Particulars Amount Amount Balance at January 1, 2019 $309,520 Land site…

Q: Assume that ABC, Inc, acquires a competitor's assets on June 10, 2020. The purchase price was…

A: As per section 197, intangible assets, any intangible asset acquired in relation to the acquisition…

Q: . On January 2, 2021, Big company classified non current asset with a carrying amount of P2,400,000…

A: In case of non-current assets, classified as held for sale the value of assets would be recorded as…

Question

37. Iron Company has the following property items at
December 31, 2021:
Particulars / Acquisition (CV) / FV 12/31/21
Land which at the date of acquisition is not
intended for any specific use in the future -
P1,000,000 / P1,800,000
Land held for future plant site - 2,000,000 /
2,600,000
Building in process of construction intended to be
leased under operating lease - 8,000,000 /
8,000,000
Building being used by the entity for its operations
- 2,5000,000 / 3,000,000
Equipment being leased under operating lease -
1,500,000 / 1,050,000
Land and Building acquired under finance leases
being used by the entity as its general and
administrative headquarter - 9,200,000 / 9,900,000
Assuming that the company adopted IAS 40,
Investment Property using the Fair value model,
what is the correct total of the investment property
reported at December 31, 2021?
P1,800,000
P9,800,000
P10,850,000
P19,700,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Introduction:

VIEW

Determination of correct amount of investment property under IAS 40:

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Background: On December 31, 2021, Company A purchased acquired various assets from Company B as follows:and assumed liabilities does not meet the definition of a business under ASC 805.UmbrellaTableLemon squeezerThe books and records of Company B value these assets at December 31, 2021 as followsUmbrella $100Table $50Lemon squeezer $150Company B determined the fair value for these assets on January 1, 2022 to be as follows:Umbrella $80Table $20Lemon squeezer $100On December 31, 2021, Company A paid $350 for these assets. Question How should the acquired asset be valued and reflected on Company A's books on January 1, 2022? US GAAP standards used: ASC_____,EY FRD Business Combinations, p. Methodology applied: Calculation: Findings: Conclusion:
17
What is the adjusted carrying amount of the land? a. 3,100,000 b. 3,300,000 c. 3,000,000 d. 3,250,000
ABC has an asset that was classified as held for sale at 31 March 2019. The asset had a carryingamount of P900 and a fair value of P800. The cost of disposal was estimated to be P50.According to PFRS 5 Non-current Assets Held for Sale and Discontinued Operations, whichvalue should be used for the asset as at 31 March 2019? * P750 P800 O P850 P900
35 The BB Company accounts for non-current assets using the revaluation model. On 30 June 2019 BB classified a freehold property as held for sale in accordance with PFRS5. At that date the property's carrying amount was P290,000 and the balance on the revaluation reserve was P20,000. At that date its fair value was estimated at P330,000 and the costs to sell at P20,000. At 31 December 2019 the property's fair value was estimated at P325,000 and the costs to sell at P25,000. If the asset was sold for a net proceeds of P285,000 in 2020, what amount should be included as loss on disposal in the entity's statement of comprehensive income for the year ended 31 December 2020?
They Company owns land and building classified as investment property . The land and building is being leased out under operating leases. The company uses cost model for its other investment property. Data relating to the land and building follows: Cost FV Dec. 31, 2020 FV Dec. 31, 2021 FV Dec. 31, 2021Land -------- P 10,000,000 -- P14,000,000 -------P15,500,000 ------- P 17,000,000Building ----- 20,000,000 --- 9,000,000 -------- 9,500,000 ------- 10,000,000 How much fair value gain should They company report in profit or loss for year 2021?note: uses cost model
At December 31, 2019, certain accounts included in the property, plant, and equipment section of Blue Spruce Corporation’s statement of financial position had the following balances: Land $309,730 Buildings—Structure 882,700 Leasehold Improvements 704,930 Equipment 844,920 During 2020, the following transactions occurred: 1. Land site No. 621 was acquired for $799,790 plus a fee of $6,780 to the real estate agent for finding the property. Costs of $33,140 were incurred to clear the land. In clearing the land, topsoil and gravel were recovered and sold for $10,950. 2. Land site No. 622, which had a building on it, was acquired for $559,950. The closing statement indicated that the land’s assessed tax value was $308,680 and the building’s value was $101,830. Shortly after acquisition, the building was demolished at a cost of $27,640. A new building was constructed for $339,530 plus the following costs: Excavation fees $37,960 Architectural design…
Case 9. The assets and liabilities of a manufacturing plant of Joy Company form a disposal group. The criteria forclassification are met on January 1, 2020, As of January 1, 2020 its carrying amount of the assets and liabilities of theplant are as follows:Goodwill allocated 200,000,000Land and building 150,000,000Plant, machinery and equipment 491,700,000Investment property 130,000,000Receivables and financial assets 75,000,000Inventories, net of writedown 110,000,000Borrowings (300,000,000)Carrying Value 856,700,000The investment property has been reported at its current fair value at the reporting date December 31, 2020. Thereceivables and financial assets were properly valued at 75,000,000. The inventories were properly valued at net realizablevalue at the reporting date.Negotiations to dispose of the manufacturing plant to JIT company is in the advanced stage and the buyer is willing to paya price of 603,400,000 to buy the plant as a whole. Cost to sell is estimated at 1,700,000.9.…
The carrying amount of the intangible assets as of December 31,2020 is A) 7,400,000 B) 9,000,000 C) 9,070,000 D) 8,850,000
7. What is the amount of revaluation surplus on December 31, 2021? A. 600,000 B. 700,000 C. 800,000 D. 0 E. None of them
18
Property 2This property was acquired in 2010 and up to 31 May 2019 was fully let to a third party. Rentalsearned from the beginning of the year up to this date were R375 000. At 1 January 2019 theproperty was carried at its fair value of R2 800 000. On the 31 May 2019 the current lease expired,and the company decided to use the property as its head office. It was occupied as such from 1June 2019. The fair value of the property on 31 May 2019 was R2 600 000. On this date theremaining useful life of the property was expected to be 20 years. It is depreciated on a straightlinebasis with a NIL residual value. Q.2.3 Calculate the carrying value for Property 2 at the year‐end date, 31 December 2019, taking into account its transfer from investment property to owner‐occupied property during the course of the year.Q.2.4Q.2.4.1 Entities hold tangible fixed assets for the purposes of consumptionor own use. Investment property, however, is held by an entity forreasons other than this. What are…