PEARS Company owned three investment properties. Details of the properties are in the table: Each property had an estimated useful life of 50 years. The accounting policy is to use the fair value model for investment properties. What is the gain or loss to be recognized for the year ended December 31, 2020?

PEARS Company owned three investment properties. Details of the properties are in the table: Each property had an estimated useful life of 50 years. The accounting policy is to use the fair value model for investment properties. What is the gain or loss to be recognized for the year ended December 31, 2020?

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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Question

PEARS Company owned three investment properties. Details of the properties are in the table:

Each property had an estimated useful life of 50 years. The accounting policy is to use the fair value model for investment properties. What is the gain or loss to be recognized for the year ended December 31, 2020?

Fair Value
Fair Value
Initial Cost
December 31, 2019
December 31, 2020
P 2,700,000
P 3,200,000
Property 1
Property 2
Property 3
P 3,500,000
3,450,000
3,000,000
2,800,000
3,300,000
3,900,000
3,400,000

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