Please provide solutions and explaination. Thank you. 1. On January 1, 20x1, NURTURE REAR Co. acquired a building with an estimated useful life of 10 years and residual value of ₱400,000 for a total cost of ₱4,000,000. The fair value of the building on January 1, 20x1 is ₱4,800,000 while the fair value on December 31, 20x1 is ₱5,200,000. NURTURE estimates that if the building is sold currently on December 31, 20x1, costs to sell amount to ₱200,000. NURTURE uses the straight line method in depreciating its PPE. NURTURE uses the fair value model for its investment properties. The year-end adjusting entry will include: a. 360,000 depreciation b. 400,000 unrealized gain c. 200,000 unrealized gain d. 1,200,000 unrealized gain
Please provide solutions and explaination. Thank you.
1. On January 1, 20x1, NURTURE REAR Co. acquired a building with an estimated useful life of 10 years and residual value of ₱400,000 for a total cost of ₱4,000,000. The fair value of the building
on January 1, 20x1 is ₱4,800,000 while the fair value on December 31, 20x1 is ₱5,200,000. NURTURE estimates that if the building is sold currently on December 31, 20x1, costs to sell
amount to ₱200,000. NURTURE uses the
uses the fair value model for its investment properties. The year-end
a. 360,000 depreciation
b. 400,000 unrealized gain
c. 200,000 unrealized gain
d. 1,200,000 unrealized gain
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