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On January 1, 2019, Intimate Corporation purchased land at a cost of P7,200,000. The entity used the revaluation model for this asset. The fair value of the land was P8,400,000 on December 31, 2019 and P10,200,000 on December 31, 2020. On July 1, 2021, the entity decided to sell the land and therefore classified the asset as held for sale. The fair value of the land on this date is P9,120,000. The estimated cost of disposal is almost zero. On December 31, 2021, the land was sold for P9,600,000.   What amount of OCI should be recognized in

On January 1, 2019, Intimate Corporation purchased land at a cost of P7,200,000. The entity used the revaluation model for this asset. The fair value of the land was P8,400,000 on December 31, 2019 and P10,200,000 on December 31, 2020. On July 1, 2021, the entity decided to sell the land and therefore classified the asset as held for sale. The fair value of the land on this date is P9,120,000. The estimated cost of disposal is almost zero. On December 31, 2021, the land was sold for P9,600,000.   What amount of OCI should be recognized in

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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On January 1, 2019, Intimate Corporation purchased land at a cost of P7,200,000. The entity used the revaluation model for this asset. The fair value of the land was P8,400,000 on December 31, 2019 and P10,200,000 on December 31, 2020. On July 1, 2021, the entity decided to sell the land and therefore classified the asset as held for sale. The fair value of the land on this date is P9,120,000. The estimated cost of disposal is almost zero. On December 31, 2021, the land was sold for P9,600,000.

 

  1. What amount of OCI should be recognized in the statement of comprehensive income for the year ended December 31, 2020?
    1. ₱480,000                                                  ₱3,000,000
    2. ₱1,080,000                                     ₱1,800,000
  1. What amount of gain or loss on sale of land is recognized in 2021?
    1. ₱480,000 gain                                          ₱2,400,000 gain
    2. ₱600,000 loss                                     ₱1,200,000 gain
  1. What amount of OCI is transferred to retained earnings in 2021?
    1. ₱3,000,000                                     ₱1,200,000
    2. ₱2,400,000                                     ₱1,920,000
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