Red Company acquired a building on January 1, 2021 for P20,000,000. At that date, the building had an estimated useful life of 40 years. The building was appropriately classified as investment property and accounted for using the fair value model. Red uses straight-line method to depreciate its property, plant and equipment. The fair value of the building was P23,000,000 on December 31, 2021. What amount shall be presented in the statement of financial position at December 31, 2021 as investment property and recognized in profit or loss for the year 2021 respectively? Choices: P19,500,000 and depreciation expense of P500,000 P20,000,000 and depreciation expense of P500,000 P20,000,000 and P3,000,000 gain P23,000,000 and P3,000,000 gain
Red Company acquired a building on January 1, 2021 for P20,000,000. At that date, the building had an estimated useful life of 40 years. The building was appropriately classified as investment property and accounted for using the fair value model. Red uses straight-line method to depreciate its property, plant and equipment. The fair value of the building was P23,000,000 on December 31, 2021. What amount shall be presented in the statement of financial position at December 31, 2021 as investment property and recognized in profit or loss for the year 2021 respectively? Choices: P19,500,000 and depreciation expense of P500,000 P20,000,000 and depreciation expense of P500,000 P20,000,000 and P3,000,000 gain P23,000,000 and P3,000,000 gain
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 7RE: Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of...
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Red Company acquired a building on January 1, 2021 for P20,000,000. At that date, the building had an estimated useful life of 40 years. The building was appropriately classified as investment property and accounted for using the fair value model. Red uses straight-line method to
Choices:
P19,500,000 and depreciation expense of P500,000
P20,000,000 and depreciation expense of P500,000
P20,000,000 and P3,000,000 gain
P23,000,000 and P3,000,000 gain
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