Which of the statements are true?
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Q: rated as the largest shopping mall in North America. The company's board of directors, after much…
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Q: ABC Shopping Inc., a listed company in the Philippines, ventured into construction of a mega…
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A: A disposal group is a group of assets & liabilities that are intentionally to be sold off.
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- An entity has agreed in a directors’ meeting to sell a building and has tentatively started looking for a buyer for the building. The price of the building has been fixed at P6 and a surveyor has valued the building based on market prices at P5.6M. The entity will continue to use the building until another building has been found with equivalent facilities, and in a suitable location for the office staff, who will not be relocated until the new building has been found. Additionally, the entity is planning to sell part of its business and has actively marketed the business at a fair price but, before the business can be sold, government approval is required, and any sale requires government approval. This means that the sale time is difficult to determine and it may take longer than one year to sell the disposal group. Which of the statements are true? A. The building and the disposal group which is a part of their business can be classified as held-for-sale. B. The building and the…Sam Ltd owns a piece of vacant land in Broadmeadows. A substantial number of factory owners establish their manufacturing plant in this location due to its accessibility and high affordability. The management of Sam Ltd wants to adopt fair value model to measure the land on 30 June 2021. Which of the following information is most useful in assisting management in estimating the fair value of the land? Group of answer choices Sam Ltd intends to lease out the land in the next financial year, and they believe they could receive an annual lease payment of $50,000. A factory owner purchased a piece of vacant land near Broadmeadows for $1m to build a new factory plant on 21 May 2021. The cost to build a new factory on a piece land in Broadmeadows is about $200,000. A landowner sold a piece of vacant land in Southbank to a property developer for $1.05m on 21 May 2021.Finley Co. is looking for a new office location and sees a building with a fair value of $400,000. Finley also notices that much of the equipment in the existing building would be useful to its own operations. Finley estimates the fair value of the equipment to be $80,000. Finley offers to buy both the building and the equipment for $450,000, and the offer is accepted. Determine the amounts Finley should record in the separate accounts for building and equipment.
- Finley Company is looking for a new office location and sees a building with a fair value of $740,000. Finley also notices that much of the equipment in the existing building would be useful to its own operations. Finley estimates the fair value of the equipment to be $114,000. Finley offers to buy both the building and the equipment for $790,000, and the offer is accepted. Determine the amounts Finley should record in the separate accounts for building and equipment. (Do not round intermediate calculations.)Finley Company is looking for a new office location and sees a building with a fair value of $720,000. Finley also notices that much of the equipment in the existing building would be useful to its own operations. Finley estimates the fair value of the equipment to be $112,000. Finley offers to buy both the building and the equipment for $770,000, and the offer is accepted. Determine the amounts Finley should record in the separate accounts for building and equipment. (Do not round Intermediate calculations.) Building Equipment TotalThe property of the former administrative centre of Tyre Ltd (Tyre) is owned by the company. Tyre had decided in the year that the property was surplus to requirements and demolished the building on 10 June 2020. After demolition, the company will have to carry out remedial environmental work, which is a legal requirement resulting from the demolition. It was intended that the land would be sold after the remedial work had been carried out. However, land prices are currently increasing in value and, therefore, the company has decided that it will not sell the land immediately. Tyre uses the cost model' in IAS16 Property, plant and equipment' and has owned the property for many years. Required: Advise the directors how to treat the above in the financial statements for the year ended 31 May 2020.
- Galore Company ventured into construction of a condominium in Makati which is rated as the largest state-of- the-art structure. The entity's board of directors decided that instead of selling the condominium, the entity would hold this property for purposes of eaming rentals by letting out space to business executives in the area. The construction of the condominium was completed and the property was placed in service on January 1 2019. The cost of the construction was P50,000,000. The useful life of the condominium is 25 years and its residual value is P5,000,000. An independent valuation expert provided the following fair value at each subsequent year-end: December 31, 2019 December 31, 2020 December 31, 2021 55,000,000 53,000,000 60,000,000 Required: Prepare all indicated entries for 2019, 2020 and 2021 assuming the investment property is accounted for under the cost model and fair value model.Jax Construction Company plans to erect a new building. It will use part of the space for its own offices and lease the balance of the space to tenants. The company has two alternatives: (1) do its own construction work or (2) use an independent contractor. Cost estimates have been prepared to show the costs of operation for the coming year during which the new building will be constructed. The costs of constructing the building, if done by Jax, are included in that set of estimates. If the company does its own construction work, it will not be able to handle outside construction contracts that would contribute $500,000 to net income. The costs attributable to these outside contracts are excluded from the estimated costs of operation shown below. Estimated Costs toOperate –Construction byIndependentContractors Estimated Costs toOperate (includingConstruction) –Construction by Jax(self) Materials $6,000,000 $7,000,000 Labour 3,000,000 4,800,000 Indirect materials and…1. During the year, Agency XYZ entered into a contract with a third party for the construction of a new building. The contract price was P15 million. The new building was not finished on the agreed deadline due to lack of equipment needed for the construction. The contractor was charged for liquidation damages worth P500,000. The agency director also wanted its old building to be connected to the new building for the convenience of its employees and also of the public. Letters were sent out to interested third parties for this project and a date was set up for the bidding. Estimated cost of the project is P5 million. How much is the cost of the building?
- ABC Shopping Inc., a listed company in the Philippines, ventured into construction of a mega shopping mall. The company's board of directors aftermarket research decided that instead of selling the shopping mall to a local investor, who had approached them several times during the construction period with excellent offers which he progressively increased duringnthe year of construction, the company would hold this property for the purposes of earning rentals by letting out space in the shopping mall to tenants. Within months of the completion of the construction the shopping mall was fully let out. The construction of the shopping mall was completed and tge property was placed in service at the end of 2018. According to the company's engineering department the computed total cost of the construction of the shopping mall was P100 million. An independent valuation expert was used by the company to fair value the shopping mall on an annual basis. According to the fair valuation expert…GGG Company ventured into construction of a condominium in Baguio which is rated as the largest state-of-the-art structure. The board of directors decided that instead of selling the condominium, the entity would hold this property for purposes of earning rentals by letting out space to business executives in the area. The construction of the condominium was completed and the property was placed in service on January 1, 2019. The cost of the construction was P50,000,000. The useful life of the condominium is 25 years and the residual value is P5,000,000. An independent valuation expert provided the following hair value at each subsequent year-end: December 31, 2019 = 55,000,000; December 31, 2020 = 53,000,000; December 31, 2021 = 60,000,000. Under fair value model, what amount should be recognized as gain from change in fair value in 2019?GGG Company ventured into construction of a condominium in Baguio which is rated as the largest state-of-the-art structure. The board of directors decided that instead of selling the condominium, the entity would hold this property for purposes of earning rentals by letting out space to business executives in the area. The construction of the condominium was completed and the property was placed in service on January 1, 2019. The cost of the construction was P50,000,000. The useful life of the condominium is 25 years and the residual value is P5,000,000. An independent valuation expert provided the following hair value at each subsequent year-end: December 31, 2019 = 55,000,000; December 31, 2020 = 53,000,000; December 31, 2021 = 60,000,000. Under the cost model, what amount should be reported as depreciation on investment property for 2019?
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