PEARS Company owned three investment properties. Details of the properties are as follows:(see photo) PEARS Company owned three investment properties. Details of theproperties are as follows: *Fair ValueFair ValueInitial CostDecember 31, 2019December 31, 2020Property 1Property 2Property 3P 3,500,0002,800,0003,400,000P2,700,000P3,200,0003,450,0003,000,0003,900,0003,300,000Each property had an estimated useful life of 50 years. The accounting policy is to use the fair valuemodel for investment properties. What is the carrying value of the investment properties that shouldbe presented in the 2020 statement of financial position?Your answer

As the Accounting policy of the company is to use Fair Value Model, at the end of each reporting…

Answered: PEARS Company owned three investment…

PEARS Company owned three investment properties. Details of the properties are as follows: * Fair Value Fair Initial Cost December 31, 2019 December Property 1 P2,700,000 P3,200,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Jonas Tech Corporation recently acquired Innovation Plus Company. The combined firm consists of three related businesses that will serve as reporting units. In connection with the acquisition, Jonas requests your help with the following asset valuation and allocation issues. Support your answers with references to FASB ASC as appropriate.Jonas recognizes several identifiable intangibles from its acquisition of Innovation Plus. It expresses the desire to have these intangible assets written down to zero in the acquisition period.The price Jonas paid for Innovation Plus indicates that it paid a large amount for goodwill. However, Jonas worries that any future goodwill impairment may send the wrong signal to its investors about the wisdom of the Innovation Plus acquisition. Jonas thus wishes to allocate the combined goodwill of all of its reporting units to one account called Enterprise Goodwill. In this way, Jonas hopes to minimize the possibility of goodwill impairment because a decline…
Uramilaben
SOLVE ALL QUESTIONS OTHERWISE LEAVE IT
Hobbes Corporation’s purchase of stock of Tiger Company gave Hobbes voting control over Tiger. A portion of the amount Hobbes paid reflects the fact that Tiger's inventories have a market value in excess of their book value.How should this portion of the cost be accounted for by Hobbes Corporation? Select one: a. Reported as goodwill on the balance sheet of Hobbes Corporation b. Amortized against investment revenue over the remaining useful life of the investment c. Included in the carrying value of the investment until disposition of the stock d. Added to the inventory cost on Hobbes's consolidated balance sheet
SEASH, Inc. acquired an office building, land, and equipment in a single basket purchase. The fair values were $1,800,000, $900,000, and $300,000 for the building, land, and equipment, respectively. The company recorded the building for $1,620,000. What was the total purchase cost for all three assets?
ACCOUNTING FOR INVESTMENT PROPERTY.PROBLEM 1. PLEASE ANSWER AND SHOW SOLUTION
Prycal Co. merges with InterBuy, Inc., and acquires several different categories of intangible assets including trademarks, a customer list, copyrights on artistic materials, agreements to receive royalties on leased intellectual property, and unpatented technology.a. Describe the criteria for determining whether an intangible asset acquired in a business combination should be separately recognized apart from goodwill.b. For each of the acquired intangibles listed, identify which recognition criteria (separability and legal/contractual) may or may not apply in recognizing the intangible on the acquiring firm’s financial statements.
Carver Incorporated purchased a building and the land on which the building is situated for a total cost of $ 917,500 cash. The land was appraised at $179,371 and the building at $875, 754.
Rodriguez Company pays $342,225 for real estate with land, land improvements, and a building. Land is appraised at $245.000; land improvements are appraised at $73,500; and a building is appraised at $171,500. 1. Allocate the total cost among the three assets. 2. Prepare the journal entry to record the purchase.
Hastings Company has purchased a group of assets for $350,000. The assets and their market values are listed as follows: Land $125,000 Equipment 75,000 Building 200,000 Which of the following amounts would be debited to the Land account? a. $125,000. b. $109,375. c. $65,625. d. $175,000.
Carver Incorporated purchased a building and the land on which the building is situated for a total cost of $972, 500 cash. The land was appraised at $257,226 and the building at $861,149. Required a. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building. b. Would the company recognize a gain on the purchase? c. Record the purchase in a horizontal statements model. d. Record the purchase in general journal format.
Ted Khan owns Khan Development Inc. During 20X7, the following transactions took place: Transaction A Transaction B Transaction C Khan acquired a parcel of land for $11,400,000 (plus 2% in real estate commissions). On closing, Khan paid $45,400 in legal fees as well as $23,300 in back taxes owed on the property. The land would be used to build new semi-detached and row townhouses. Immediately following the purchase, Khan submitted a proposal to the municipality to rezone the property to residential use. Legal fees and other admin costs associated with the rezoning permits were $59,000. Upon approval, Khan completed grading and added new drainage that was required as part of the approval. The total cost of this work was $173,000. Khan also acquired another nearby parcel of land, already zoned as residential for $1,680,000. The land had two houses that were inhabitable in their current state. Khan planned to use this site to build their sales office and showrooms for the sites above. The…