Robust Company purchased an investment property on January 1, 2019, at a cost of P4,000,000. The property had a useful life of 20 years and on December 31, 2020, had a fair value of P4,800,000. On December 31, 2020, the property was sold for net proceeds of P4,500,000. The entity used the cost model to account for the investment property. What is the gain to be recognized for 2020 regarding the disposal of the investment property? a. 900,000 b. 500,000 c. 800,000 d. 700,000
Robust Company purchased an investment property on January 1, 2019, at a cost of P4,000,000. The property had a useful life of 20 years and on December 31, 2020, had a fair value of P4,800,000. On December 31, 2020, the property was sold for net proceeds of P4,500,000. The entity used the cost model to account for the investment property. What is the gain to be recognized for 2020 regarding the disposal of the investment property? a. 900,000 b. 500,000 c. 800,000 d. 700,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Robust Company purchased an investment property on January 1, 2019, at a cost of P4,000,000. The property had a useful life of 20
years and on December 31, 2020, had a fair value of P4,800,000. On December 31, 2020, the property was sold for net proceeds of
P4,500,000. The entity used the cost model to account for the investment property.
What is the gain to be recognized for 2020 regarding the disposal of the investment property?
a. 900,000
b. 500,000
c. 800,000
d. 700,000
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