On January 2, 2019, Jillian Company made a test of impairment on one of its buildings carried as plant asset. The test on impairment revealed a recoverable value of P5,500,000 on that building. The carrying value of this building as of January 2, 2019 is P8,000,000 with a remaining useful life of 10 years. On January 1, 2021, Jillian Company decided to convert this building into an investment property that is to be carried at fair value. The cost of converting the building is insignificant but as a result of the change in the usage, the fair market value of the building was reliably valued at P7,000,000. What amount of revaluation surplus should Jillian Company disclose in the shareholders’ equity as of December 31, 2021?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

On January 2, 2019, Jillian Company made a test of impairment on one of its buildings carried as plant
asset. The test on impairment revealed a recoverable value of P5,500,000 on that building. The carrying
value of this building as of January 2, 2019 is P8,000,000 with a remaining useful life of 10 years.
On January 1, 2021, Jillian Company decided to convert this building into an investment property that is
to be carried at fair value. The cost of converting the building is insignificant but as a result of the change in the usage, the fair market value of the building was reliably valued at P7,000,000. What amount of
revaluation surplus should Jillian Company disclose in the shareholders’ equity as of December 31, 2021?

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Accounting for Current liabilities, Provisions and Contingencies
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
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education