Pioneer Property Corporation owns and holds several property leases. items that are held for rent to retail entities under operating In July 2022, the entity transferred its marketing and other administrative operations to Pasig City and decided to lease under operating leases, the spaces in the Pioneer Building that was previously occupied for use in its operations. On January 2, 2022, the Pioneer Building had a carrying value of P4,000,000, (with cost of P8,200,000). The fair value on July 1, 2022, determined through an independent appraisal, was P5,000,000. Pioneer Building. The corporation records annual depreciation of P200,000 on the Pioneer Property Corporation uses the fair value model to account for its investment property. REQUIRED: Prepare the necessary entries in 2022 as a result of the foregoing.

Pioneer Property Corporation owns and holds several property leases. items that are held for rent to retail entities under operating In July 2022, the entity transferred its marketing and other administrative operations to Pasig City and decided to lease under operating leases, the spaces in the Pioneer Building that was previously occupied for use in its operations. On January 2, 2022, the Pioneer Building had a carrying value of P4,000,000, (with cost of P8,200,000). The fair value on July 1, 2022, determined through an independent appraisal, was P5,000,000. Pioneer Building. The corporation records annual depreciation of P200,000 on the Pioneer Property Corporation uses the fair value model to account for its investment property. REQUIRED: Prepare the necessary entries in 2022 as a result of the foregoing.

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

Central Purchasing Ltd. (CPL) owns the building it uses; it had an original cost of $8,456,000 and accumulated depreciation of $2,536,800 as of 1 January 20X2. On this date, the building (but not the land) was sold to a real estate Investment trust (REIT) for $7,956,000, which also was the building's fair value, and simultaneously leased back to CPL. The lease has a 15-year term and required payments on 31 December of each year. The payments are $706,000 with no transfer of title or purchase option. CPL will pay all of the building's operating and maintenance costs including property taxes and Insurance. CPL's Incremental borrowing rate is 9%. The building is being depreciated straight-line with a full year's depreciation in the year of acquisition. (PV of $1. PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare entries for CPL to record the sale and leaseback of the building. (If no entry is required for a transaction/event, select "No…
Central Purchasing Ltd. (CPL) owns the building it uses; it had an original cost of $8,096,000 and accumulated depreciation of $2,428,800 as of 1 January 20X2. On this date, the building (but not the land) was sold to a real estate Investment trust (REIT) for $7,596,000, which also was the building's fair value, and simultaneously leased back to CPL. The lease has a 15-year term and required payments on 31 December of each year. The payments are $646,000 with no transfer of title or purchase option. CPL will pay all of the building's operating and maintenance costs including property taxes and insurance. CPL's Incremental borrowing rate is 9%. The building is being depreciated straight-line with a full year's depreciation in the year of acquisition. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare entries for CPL to record the sale and leaseback of the building. (If no entry is required for a transaction/event, select "No…
Sheridan Corporation owns and manages a small 10-store shopping centre, which it classifies as an investment property. Sheridan has a May 31 year end and initially recognized the property at its acquisition cost of $11.2 million on June 2, 2022. The acquisition cost consisted of the purchase price of $105 million, costs to survey and transfer the property of $460,000, and legal fees to acquire the property of $240,000. Sheridan determines that approximately 26% of the shopping centre's value is attributable to the land, with the remainder attributable to the building. The following fair values are determined: Date May 31, 2023 May 31, 2024 Fair Value $10,700,000 $10,594,000 May 31, 2025 $11,208,000 Sheridan expects the shopping centre building to have a 35-year useful life and a residual value of $1.428 million. Sheridan uses the straight-line method for depreciation.
On January 1, 2020, Elden Ring Co. signed a 12-year lease for warehouse space. The entity has an option to renew the lease for an additional 8-year period on or before January 1, 2024. During January 2022, the entity made substantial improvement to the warehouse. The cost of the improvement was P540,000 with an estimated useful life of 15 years. On December 31, 2022, the entity intended to exercise the renewal option. What is the carrying amount of the leasehold improvement as of December 31, 2022? O a. 510000 O b. 486000 O c. 504000 d. 513000
Not a graded assignment.
Christina Co. has a factory equipment with a carrying amount of P700,000 and has a remaining useful life of 7 years. On January 1, 2020, Christina agreed to an exchange transaction with Kat & Inc. to transfer the equipment to the latter. The transfer satisfied the requirements of PFRS 15 to be a sale and Christina immediately leased it back for a lease term equal to the remaining life of the equipment. The sales price amounted to P500,000 while annual rental payable at the end of each year is P100,000 for an implicit rate of 10%. Selling price is equal to fair value. How much loss shall Christina recognize in relation to the sale and leaseback transaction? a. 681,578.63 b. 200,000 c. 194,736.75 d. 5,263.25
Oriole Co. purchases land and constructs a service station and car wash for a total of $472500. At January 2, 2021, when construction is completed, the facility and land on which it was constructed are sold to a major oil company for $510000 and immediately leased from the oil company by Oriole. Fair value of the land at time of the sale was $46500. The lease is a 10-year, noncancelable lease. Oriole uses straight-line depreciation for its other various business holdings. The economic life of the facility is 15 years with zero salvage value. Title to the facility and land will pass to Oriole at termination of the lease. A partial amortization schedule for this lease is as follows: Раyments Interest Amortization Balance Jan. 2, 2021 $510000.00 Dec. 31, 2021 $83000.15 $51000.00 $32000.15 477999.85 Dec. 31, 2022 83000.15 47799.99 35200.16 442799.69 Dec. 31, 2023 83000.15 44279.97 38720.18 404079.51 The total lease-related income recognized by the lessee during 2022 is which of the…
40
1. On December 31,2020 the account for Shane Oil Company's individually insignificant unproved properties had a balance of $600,000. The impairment allowance account had a balance of $100,000. Required Give the entries for each of the following transactions occurring in 2020 and 2021 (all transactions concern individually Insignificant unproved leases) a.Assuming Shane has a policy of maintaining a 60% allowance, i.e. 60% of gross unproved properties, give the entry to record impairment on December 31, 2020 b.During 2021 Shane surrendered leases that cost $200,000. c.During 2021,leases that cost $40,000 were proved d.Give the entry to record impairment on December 31, 2021.
3-2. Precious Realty Corporation owns and holds several property items that are held for sale as subdivided lots, condominiums and row houses. In addition, it also owns the Rainbow Building, which it is leasing to tenants under operating leases. In July 2021, because of planned expansion for year 2022, the company served notices to the Rainbow Building tenants for the termination of lease contracts on the facilities. On January 2, 2022, the Rainbow Building, which at that date had a carrying value of P4,000,000, (with cost of P8,200,000) was occupied by the company to carry out its sale and administrative activities. The corporation records annual depreciation of P200,000 on the Rainbow Building. REQUIRED: Prepare the necessary entries in 2022 as a result of the foregoing. The company carries its investment property and its property, plant and equipment using the cost model.
Assume that on December 31, 2024, Kimberly-Clark Corp. signs a 10-year, non-cancelable lease agreement to lease a storage building from Sandhill Storage Company. The following information pertains to this lease agreement. 1. The agreement requires equal rental payments of $66.999 beginning on December 31, 2024. 2. The fair value of the building on December 31, 2024, is $490,629. 3. 4. 5. The building has an estimated economic life of 12 years, a guaranteed residual value of $11,000, and an expected residual value of $8,100. Kimberly-Clark depreciates similar buildings on the straight-line method. The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor. Kimberly-Clark's incremental borrowing rate is 8% per year. The lessor's implicit rate is not known by Kimberly-Clark Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided) (a) Your answer is partially correct. Prepare the journal…
On 13 February 20X5, Reekwa Company purchased an office tower for $31.1 million. The office is a mixed-use property: it is owner- occupied and includes rental units. The fair value of the building on 31 December 20X6 is $31.5 million and $28.0 million on 31 December 20X8. At the time of purchase, the office tower has a remaining useful life of 25 years, and is amortized on a straight-line basis. Required: 1. Should the office tower be considered property, plant, and equipment or investment property? Property, plant, and equipment Investment property 2. Assume the property is determined to be PPE, and management applies the elimination method for the revaluation model. Prepare the required journal entries for the revaluation of the office tower in 20X6 and 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 Date 31 December 20X6 No journal entry required 2 31 December 20X8 Accounts payable General Journal Debit × ×…