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FINANCIAL ACCOUNTING
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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Beginning of 2021, a land with a huge complex building was purchased at P 50,000,000. It was then decided that 25% of the complex will be used for cockpit arena while the rest of the spaces will be for rental. 80% of the total cost was allocated to the land and that its total life is 50 years and this was purchased by the entity after 20 years of use by the previous owner. Additional Costs incurred before use is at P 10,000,000. Its ending fair values are 110% and 112% of the original cost for 2021 and 2022, respectively. If the property is subsequently accounted at fair value model and depreciated on a straight line method, what will be the carrying value of the Investment Property at the end of 2022?
Transcribed Image Text:Beginning of 2021, a land with a huge complex building was purchased at P 50,000,000. It was then decided that 25% of the complex will be used for cockpit arena while the rest of the spaces will be for rental. 80% of the total cost was allocated to the land and that its total life is 50 years and this was purchased by the entity after 20 years of use by the previous owner. Additional Costs incurred before use is at P 10,000,000. Its ending fair values are 110% and 112% of the original cost for 2021 and 2022, respectively. If the property is subsequently accounted at fair value model and depreciated on a straight line method, what will be the carrying value of the Investment Property at the end of 2022?
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