On January 1, 2020, ERNSTCo. finished constructing an edifice that will be accounted for as an investment property using the cost model.Total construction cost was P35,000,000. The entity estimates that the asset will be useful for 40 years. Continuing repairs on the building amount to P60,000 every year, and annual real property tax to be paid by the company is P110,000. Determine the following: 1.Annual expenses incurred by ERNSTin relation to its investment property. 2.Carrying amountof the asset at the end of 2022.

On January 1, 2020, ERNSTCo. finished constructing an edifice that will be accounted for as an investment property using the cost model.Total construction cost was P35,000,000. The entity estimates that the asset will be useful for 40 years. Continuing repairs on the building amount to P60,000 every year, and annual real property tax to be paid by the company is P110,000. Determine the following: 1.Annual expenses incurred by ERNSTin relation to its investment property. 2.Carrying amountof the asset at the end of 2022.

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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