Which of the statements are true?
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Q: Which of the statements are true?
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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…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 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.
- 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?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.
- On December 31, 2021, management of Jines Construction committed to a plan for selling an office building and its related equipment. Both are available for immediate sale. The building has a book value of $800,000 and a fair value of $900,000. The equipment has a book value of $240,000 and a fair value of $200,000. Calculate the amount that each asset will be reported at in the balance sheet and the amount of any gain or loss that will be reported in the income statement for the year ended December 31, 2021. Management expects to sell both assets in 2022.On July 2014, Thunder Company is committed to a plan to sell a disposal group that represents a significant portion of its regulated operations. The sale requires regulatory approval, which could extend the period required to complete the sale beyond one year. Actions necessary to obtain that approval cannot be initiated until after a buyer is known and a firm purchase commitment is obtained. However, a firm purchase commitment is highly probable within one year. The noncurrent assets of disposal group have a carrying value of P4,000,000 and liabilities of P1,000,000. The total fair market value as of December 31, 2014 of the disposal group is P4,800,000. If the sale is completed within one year, the estimated cost to sell is P200,000, but if the sale will extend beyond one year, the present value of the estimated cost to sell is P180,000. If the sale will extend beyond one year, what amount of gain or loss should the company report in its 2014 profit or loss?CHOOSE THE LETTER OF ANSWER Galore Company ventured into construction of a condominium in Makati 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 leasing 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, 2020. The cost of the condominium 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 fair value at each subsequent year-end:December 31, 2020 55,000,000December 31, 2021 53,000,000December 31, 2022 60,000,000 Under the cost model, what amount should be reported as annual depreciation of investment property? a. 1,800,000b. 2,000,000c. 2,200,000d. 0 under the fair Value model, what amount should be recognized as gain from change in fair…
- Smith Corporation has a building which is being reclassifed from PPE to an investment. The building is now required to be valued at fair value as of the balance sheet date. Smith originally paid $375,000 for the building and the current carrying value is $350,000. External valuations have determined that the building's fair value should be $360,000. Smith's CEO has argued Smith Corporation would never sell the building for less than $425,000. What is the correct fair value and why? Question 10 options: a) $350,000 because that is the carrying value of the building b) $425,000 because that is the minimum sales price Smith would accept c) $360,000 because that is the perspective of the market d) $375,000 because that is the entrance price14.ABC Company is committed to a plan to sell a building and has started looking for a buyer for that building. The company will continue to use the building until another building is completed to house the office staff located in the building. There is no intention to relocate the office staff until the new building is completed. As of Dec 31, 2021, the building has a carrying amount of P250,000 and fair value less costs to sell amounted to P235,000. How much will be presented as Assets-Held-for-Sale in the statement of financial position at Dec 31, 2021? 15.During 2021, Entity F incurred P4,000,000 in exploration costs for each of 15 oil wells drilled in 2021. Of the 15 wells drilled, 10 were dry holes. The entity uses the successful efforts method of accounting. Assuming that the entity depletes 30% of the oil discovered in 2021, what amount of these exploration costs would remain in its Dec 31, 2021 statement of financial position?Pelé Corp. owns a popular convenience store in Washington state. Messi Corp. is hoping to purchase the store from Pelé for $8,500,000. Messi has identified the land and building have a fair value of $7,000,000 while inventory has a fair value of $700,000. Because of the store’s popularity, excellent customer service, and customer loyalty, Messi is willing to pay $800,000 above the fair value of the assets acquired in the purchase. If Pelé Corp. decides it will not accept anything less than $8,500,000, which Messi Corp. agrees to pay, how is the excess $800,000 payment accounted for? Excess Contributed Capital Plant, & Equipment Property, Plant, & Equipment Accumulated Deprecitation Accumulated Deprecitation
