MC13 Shoshin, Inc. owns land and building in Manila used for operations and administration. The company uses the cost model and provides you with the following information on January 1, 2022: P20,000,000 28,000,000 Land: Cost Fair value P40,000,000 10,000,000 35,000,000 Building: Cost Accumulated depreciation Fair value On this date, the company transferred its business operations to Ortigas Center and leased out the land and building above to interested business friends under operating leases. The company uses the fair value model for all of its investment property. How much gain shall be reported in profit or loss resulting from this reclassification from owner-occupied property to investment property? PO P5 million P8 million P13 million a. b. C. d.

MC13 Shoshin, Inc. owns land and building in Manila used for operations and administration. The company uses the cost model and provides you with the following information on January 1, 2022: P20,000,000 28,000,000 Land: Cost Fair value P40,000,000 10,000,000 35,000,000 Building: Cost Accumulated depreciation Fair value On this date, the company transferred its business operations to Ortigas Center and leased out the land and building above to interested business friends under operating leases. The company uses the fair value model for all of its investment property. How much gain shall be reported in profit or loss resulting from this reclassification from owner-occupied property to investment property? PO P5 million P8 million P13 million a. b. C. d.

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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Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

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Question No. 13

MC13 Shoshin, Inc. owns land and building in Manila used for
operations and administration. The company uses the cost
model and provides you with the following information on
January 1, 2022:
P20,000,000
28,000,000
Land:
Cost
Fair value
P40,000,000
10,000,000
35,000,000
Building: Cost
Accumulated depreciation
Fair value
On this date, the company transferred its business operations
to Ortigas Center and leased out the land and building above
to interested business friends under operating leases. The
company uses the fair value model for all of its investment
property.
How much gain shall be reported in profit or loss resulting
from this reclassification from owner-occupied property to
investment property?
PO
P5 million
P8 million
P13 million
a.
b.
C.
d.

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