Milk Tea Company acquired a property consisting of land and a building through foreclosure on December 1, 2021. The property was acquired for P 7,000,000 in a lump sum and estimated to benefit the company for 10 years. Milk Tea will not transfer the property to the buyer until it has completed refurbishing to increase its market value. On December 31, 2021, Milk Tea incurred a total of P500,000 for the partial refurbishing, and the property is now selling for P7,600,000. In its December 31, 2021 statement of financial position, at what amount should Milk Tea Company report the held for sale property?
Milk Tea Company acquired a property consisting of land and a building through foreclosure on December 1, 2021. The property was acquired for P 7,000,000 in a lump sum and estimated to benefit the company for 10 years. Milk Tea will not transfer the property to the buyer until it has completed refurbishing to increase its market value. On December 31, 2021, Milk Tea incurred a total of P500,000 for the partial refurbishing, and the property is now selling for P7,600,000. In its December 31, 2021 statement of financial position, at what amount should Milk Tea Company report the held for sale property?
Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion
Section: Chapter Questions
Problem 31P
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Milk Tea Company acquired a property consisting of land and a building through foreclosure on December 1, 2021. The property was acquired for P 7,000,000 in a lump sum and estimated to benefit the company for 10 years. Milk Tea will not transfer the property to the buyer until it has completed refurbishing to increase its market value. On December 31, 2021, Milk Tea incurred a total of P500,000 for the partial refurbishing, and the property is now selling for P7,600,000. In its December 31, 2021 statement of financial position , at what amount should Milk Tea Company report the held for sale property?
P7,600,000
P7,100,000
P0
P6,300,000
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