Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. ingenuous company acquired a building on january 1

Ingenuous Company acquired a building on January 1, 2020 for P9,000,000. At that date, the...

60.1K

Verified Solution

Question

Accounting

imageimage

Ingenuous Company acquired a building on January 1, 2020 for P9,000,000. At that date, the building had a useful life of 30 years. On December 31, 2020, the fair value of the building was P9,600,000 and on December 31, 2021, the fair value is P9,800,000. The building was classified as an investment property and accounted for under the cost model. What amounts should be carried in the statement of financial position and recognized in profit or loss for 2021? a. Carrying amount - 8,400,000; Profit or loss - 300,000 expense b. Carrying amount -9,000,000; Profit or loss - No gain, no loss C. Carrying amount -9,800,000; Profit or loss - 200,000 gain d. Carrying amount - 8,700,000; Profit or loss 300,000 expense Nonchalant Company owned three investment properties with the following details: Initial cost Fair value Dec 31, 2020 Property 1 2,700,000 3,200,000 Property 2 3,450,000 3,000,000 Property 3 3,300,000 3,900,000 Fair value Dec 31, 2021 4,000,000 2,100,000 3,600,000 Each property was acquired in 2020 with a useful life of 10 years. The accounting policy is to use the fair value model for investment property. What is the gain or loss to be recognized for 2021? a. 900,000 loss b. 400,000 loss C. 650,000 gain d. 300,000 loss

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students