The Philippine government grants a huge parcel of land in Cordillera to an entity. The land has a fair market value of P50,000,000. According to the terms of the award, the company must build a factory and hire solely Cordillera residents. The factory costs P80,000,000 and has a 25-year usable life. What is the net effect in the profit or loss for the year as a result of the transaction?

The Philippine government grants a huge parcel of land in Cordillera to an entity. The land has a fair market value of P50,000,000. According to the terms of the award, the company must build a factory and hire solely Cordillera residents. The factory costs P80,000,000 and has a 25-year usable life. What is the net effect in the profit or loss for the year as a result of the transaction?

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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