.Johnson Inc., owns a building purchased on Jan 1, 2017 for P50 M. The building was used as the entity's head office. The building has an estimated useful life of 25 years. In 2021, the entity transferred its head office and decided to lease out the old building. Tenants began occupying the old building by the end of 2021. On Dec 31, 2021, the entity reclassified the building as investment property. The fair value on the date of reclassification was P42 M. If the entity uses the cost model, how much should be recognized in the 2021 profit or loss as a result of the transfer from owner-occupied to investment property?
.Johnson Inc., owns a building purchased on Jan 1, 2017 for P50 M. The building was used as the entity's head office. The building has an estimated useful life of 25 years. In 2021, the entity transferred its head office and decided to lease out the old building. Tenants began occupying the old building by the end of 2021. On Dec 31, 2021, the entity reclassified the building as investment property. The fair value on the date of reclassification was P42 M. If the entity uses the cost model, how much should be recognized in the 2021 profit or loss as a result of the transfer from owner-occupied to investment property?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...
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3.Johnson Inc., owns a building purchased on Jan 1, 2017 for P50 M. The building was used as the entity's head office. The building has an estimated useful life of 25 years. In 2021, the entity transferred its head office and decided to lease out the old building. Tenants began occupying the old building by the end of 2021. On Dec 31, 2021, the entity reclassified the building as investment property. The fair value on the date of reclassification was P42 M. If the entity uses the cost model, how much should be recognized in the 2021 profit or loss as a result of the transfer from owner-occupied to investment property?
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