Salvador Company is committed to a plan to sell its headquarters building and has initiated actions to locate a buyer. As of this date, the building has a carrying amount of P5,000,000, a fair value of P6,000,000 and estimated costs to sell of P200,000. 3) How should Salvador classify the headquarters building? A. Included under property, plant and equipment at P5,000,000. B. Included under property, plant and equipment at P5,800,000. C. Classified as held for sale at P5,000,000. D. Classified as held for sale at P5,800,000.

Salvador Company is committed to a plan to sell its headquarters building and has initiated actions to locate a buyer. As of this date, the building has a carrying amount of P5,000,000, a fair value of P6,000,000 and estimated costs to sell of P200,000. 3) How should Salvador classify the headquarters building? A. Included under property, plant and equipment at P5,000,000. B. Included under property, plant and equipment at P5,800,000. C. Classified as held for sale at P5,000,000. D. Classified as held for sale at P5,800,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: You Company owns land and building classified as investment property . The land and building is…

A: When company owns land and building classified as investment property and company uses the fair…

Q: Spectrum Ltd owns the following properties at 1 April 2012: Property A: An office building used by…

A: The objective of the question is to prepare extracts from Spectrum Ltd.’s entity statement of profit…

Q: Samtech Manufacturing purchased land and a building expenditures in connection with the purchase of…

A: Assets are resources owned by a person, company, or organization that have economic value and are…

Q: PROBLEM N: At the beginning of 2018, Downtown Company acquired an intangible asset for P3,000,000.…

A: Answer 21) Calculation of impairment loss to be recognised by the company for the year 2018:::…

Q: Movies R Fun Theater received payment of $65,000 for �ckets sold for its season of four plays. The…

A: At the conclusion of an accounting period, adjusting entries are performed to update accounts and…

Q: A company acquired the following assets associated with a manufacturing facility for a lump-sum…

A: A patent is a legal privilege given by the state to the creator of a novel and practical process.…

Q: ROK Company purchased a car wash for $500,000. The fair market value of the assets acquired are as…

A: When a company purchases an asset, it records the asset at its purchase price. However, when a…

Q: 1. Prepare any necessary journal entries associated with the three classes of assets for the year…

A: Hey there since you have posted multiple questions, we can answer only first question, please…

Q: Red Rock Bakery purchases land, building, and equipment for a single purchase price of $560,000.…

A: Allocation Percentage = (Estimated Fair Value of standalone asset /Total Estimated Fair Value)*100…

Q: On December 31, 20X1, management of Plexion Corporation committed to a plan for selling an office…

A: The objective of this question is to determine the value at which the assets (office building and…

Q: Laker Grind Coffee House, Inc. purchased Brian's Bakery, Inc. for $400,000. The fair market value of…

A: Calculation of total assetsBuilding $200,000Equipment $150,000Furniture $50,000Inventory…

Q: Prepare extracts of the financial statements of Mega Consultancy in respect of the two properties…

A: Extracts of Financial statements of Mega Consultancy. Land (both) - Still the same as of June 30.…

Q: Dirt Company purchased land for $5 million dollars in 2008. At December 31, 2020 the land had a…

A: The land was purchased for $5 million dollars. According to the Historical cost concept, fixed…

Q: Carver Incorporated purchased a building and the land on which the building is situated for a total…

A: Accounting equation is mathematical equation that shows relationship between assets, liabilities and…

Q: Carla Vista Company is considering the acquisition of Kingbird, Inc. To assess the amount it might…

A: Goodwill is the term which is defined as the intangible assets that arise when the buyer acquires…

Q: Cold Stone Bakery purchases land, building, and equipment for a single purchase price of $300,000.…

A: Current assets are the assets that are expected to converted into cash within one year or due to be…

Q: Concord Corporation purchased the assets of Ivanhoe Company at an auction for $5640000. An…

A: Total of Relative fair values Land $1830000 Building 2910000 Equipment 2250000 Trucks…

Q: On December 31, 20X1, management of Plexion Corporation committed to a plan for selling an office…

A: The objective of this question is to determine the value at which the assets (office building and…

Q: Diana Company is now a growing company. An acquisition of land and construction of a new building…

A: Fixed assets are those assets which are being held by the business for longer period of time. All…

Question

Salvador Company is committed to a plan to
sell its headquarters building and has initiated
actions to locate a buyer. As of this date, the
building has a carrying amount of
P5,000,000, a fair value of P6,000,000 and
estimated costs to sell of P200,000.
3) How should Salvador classify the
headquarters building?
A. Included under property, plant and
equipment at P5,000,000.
B. Included under property, plant and
equipment at P5,800,000.
C. Classified as held for sale at P5,000,000.
D. Classified as held for sale at P5,800,000.
4) Salvador Company will continue to use the
building until construction of a new
headquarters is completed. How should
Salvador Company classify the headquarters
building?
A. Included under property, plant and
equipment at P5,000,000.
B. Included under property, plant and
equipment at P5,800,000.
C. Classified as held for sale at P5,000,000.
D. Classified as held for sale at P5,800,000.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Asset

VIEW

Answer

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

PEARS Company owned three investment properties. Details of the properties are as follows: (see photo)
! Required information [The following information applies to the questions displayed below.] The following information relates to the intangible assets of Lettuce Express: a. On January 1, 2021, Lettuce Express completed the purchase of Farmers Produce, Ic., for $1,590,000 in cash. The fair value of the identifiable net assets of Farmers Produce was $1,431,000. b. Included in the assets purchased from Farmers Produce was a patent for a method of processing lettuce valued at $54,000. The original legal life of the patent was 20 years. There are still 17 years left on the patent, but Lettuce Express estimates the patent will be useful for only 10 more years. c. Lettuce Express acquired a franchise on July 1, 2021, by paying an initial franchise fee of $187,600. The contractual life of the franchise is seven years. 2. Prepare the intangible asset section of the December 31, 2021, balance sheet. LETTUCE EXPRESS Balance Sheet December 31, 2021 (Intangible Assets Section) Intangible Assets…
(CO F) XYZ Corporation purchased land and an office building for $2,800,000. The real estate contract did not specify the amounts to allocate to the land and to the building. An appraisal determined the fair market value (FMV) of the land to be $1.000,000 and the fair market value (FMV) of the building to be $3.000,000, a) Please calculate the basis of the land. Show your work. b) Please calculate the basis of the building. Show your work.
XYZ Company had the following transactions pertaining to its new office building: Purchase price of land -P1,200.000; Legal fees for contracts to purchase land -P130,000; Architect's fee - P255,000: Demolition of old building on site -P310.000; Sale of scrap from old building -P71,000; Construction cost of new building (fully completed) -P2.450,000: Fire insurance policy on the newly constructed building for the whole year starting on the day it was completed -P250.000. At what amount should the building be shown in XYZ statement of financial position of?
Stewart Company exchanges an asset with Leonard Corporation. Details of the exchange are as follows: Stewart company’s Piece of Equipment: Cost $1,000,000Accumulated depreciation 400,000Fair Value $800,000 Leonard Corporation’s Building: Cost $1200,000 Accumulated depreciation $550,000 Fair Value $950,000 Required a) Prepare the appropriate journal entries for both companies for the above exchange assumingthey are public companies.b) If Stewart Company paid $100,000 in this transaction. Record the appropriate journal entry inStewart’s books.c) Repeat b) assuming that Stewart Company is a private company and that the fair value ofLeonard’s building is the most determinable fair value
The Chicago Corporation acquired a piece of land in a business combination transaction from the Milwaukee Corporation, an unrelated company. The land originally cost $750,000 when purchased by Milwaukee Corporation. The fair value of the land has subsequently been considered by Chicago Corporation for two different purposes, one as a site for a storage facility and the other as site for a grocery store. If the land is used to develop as a storage facility the fair value was estimated to be $1,000,000 and alternatively, the land for the grocery store is estimated to be $1,250,000. The land is currently zoned for both purposes. Chicago Corporation intends to use the property to develop as a storage facility. Which value should the Chicago Corporation use in its financial statements for the land? (do not use dollar signs, commas or decimals in your answer) What fair value principle did you use to determine the fair value?
Goodman Company exchanges an asset with The Pryce Corporation. Details of the exchange are as follows: Goodman’s Piece of equipment: $800,000 230,000 700,000 Pryce's building: Cost Cost $960,000 350,000 850,000 Accumulated depreciation Accumulated depreciation Fair value Fair value Required- a) Prepare the journal entry in the books of both Goodman and Pryce, assuming both are public companies. b) Assume now that Goodman paid $80,000 in this transaction. Record the appropriate journal entry in Goodman books. c) Repeat b) assuming now that Goodman is a private company and that the fair value of Pryce's building is the most determinable fair value.