Answered: Fair Value Fair Value Initial Cost…

Fair Value Fair Value Initial Cost Property 1 Property 2 Property 3 P2,700,000 3,450,000 3,300,000 December 31, 2019 P 3,200,000 3,000,000 3,900,000 December 31, 2020 P 3,500,000 2,800,000 3,400,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: An asset used in a 4-year project falls in the 5-year MACRS class (refer to MACRS table on page…

A: The objective of the question is to calculate the after-tax salvage value of an asset. The after-tax…

Q: using hte information from the photos, can you please help me prepare the appropriate schedules to…

A: Depreciation The purpose of providing the depreciation cost to know the actual values which are…

Q: An asset used in a 4-year project falls in the 5 year MACRS class, for tax purposes. The asset has…

A: Salvage value net of tax is that amount which is received by the investor from selling the assets at…

Q: 50,000. • The UCC on building 2 at the beginning of 2021 was $40,000. • Property 2 was sold in 2021…

A: Thato Smit own rental property Original value = $275000 Property 1 : Land = $70000 Building =…

Q: ! Required information [The following information applies to the questions displayed below.] Metro…

A: NET PRESENT VALUENet Present Value is one of the Important Capital Budgeting Techniques. Net present…

Q: On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as…

A: A company identifies borrowings—or portions of borrowings—that were particularly used to fund an…

Q: 42) On January 1, 2019, Pet Company purchased a machine. The seller agreed that a total of $27,000…

A: The amount to be debited in the machinery account will be the total present value of the cash flows…

Q: A consulting company is buying a new computer system for their headquarters for $175,000. The asset…

A: New Computer Cost = $175,000 Asset Life = 5 Years

Q: Investment in Real Estate is a longterm investment which affect the cash flows position of the…

A: Investment means engaging the funds to generate some profits in the future. There are various…

Q: How about these other questions? 4.Using the same information above, how much is the balance of the…

A: Construction work in progress means the cost related to the work in progress of each incomplete work…

Q: r 2020, these are sections Asset Type Date of purchase Cost Useful life from the date of…

A: Assets: When a company expects to derive the benefits in the form of a cash stream over a long…

Q: 3. As at 31 December 2020, the property had a fair value of €230,000. This property was previously…

A: (a) Journal entries for 3, 4 and 5 : 3. As on 31.12.2020, The property had fair value = E230000 Cost…

Q: b) Property, Plant, & Equipment (2020) Equipment Less: Accumulated depreciation

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to…

Q: PROBLEM 20-5: Initial measurement - Investment property leased under finance lease On January 1,…

A: Initial Recognition of Investment Property According to PAS 17 initial measurement of the investment…

Q: An asset used in a 4-year project falls in the 5-year MACRS class, for tax purposes. The asset has…

A: After-tax salvage value refers to the value of the asset at the time of sale of an asset after…

Q: At the end of 2020, Aylmer Inc owns an intangible asset with a remaining life of 10 years. Aylmer…

Q: How much is the total carrying amount of the property as of June 30, 2021? Show the solutions…

A: Depreciation Cost The purpose of using the depreciation method to know the actual cost of the assets…

Q: When considering a potential capital investment, you determine that the investment will likely have…

A: The question is based on the concept of Financial Management. When we make any potential capital…

Q: The direct capitalization method can be used to quickly value a building. You are evaluating a…

A: The GIM is calculated by dividing the sales price of comparable properties by their gross income. In…

Q: An asset used in a 4-year project falls in the 5-year MACRS class, for tax purposes. The asset has…

A: Book value= (purchase price)*(1-sum of MACR rates from beginning to current date)= 20349349 *(1-(20%…

Q: Aurora Trucking's 2023 balance sheet showed net fixed assets of $2.4 million, while its 2022 balance…

A: Net fixed assets in 2023 = $2,400,000 Net fixed assets in 2022 = $2,300,000Depreciation expenses in…

Q: NANGUTANG started constructing a building for its own use on January 1, 2020. NANGUTANG provided the…

A: Effective Rate of Interest= Total Amount of Interest/Total Amount of Loan 2500000/30000000=8.33%

Q: Consider the information provided below and then complete the table by entering the respective…

A: As per the provision contain in Accounting Standard Property Plant and Equipment any cost which is…

Q: Merrill Corporation has the following information available about a potential capital investment:…

A: Initial investment = $2,500,000Annual net income = $160,000Salvage value = $170,000Depreciation =…

Q: Consider the following cash flow statement for a property fully leased to a new tenant on a NNN…

A: Charges that can be charged back to the tenant are known as the recoverable opex. These include…

Q: (f) The IASB's Conceptual Framework for Financial Reporting 2010 (IFRS Framework) requires financial…

A: IFRS or International Financial Reporting Standards are the guidelines of accounting given by the…

Q: The capitalized cost of an asset is the total of the original cost and the present value of all…

A: The capitalized cost of the asset is the sum of all costs of the assets. It considers the present…

Q: • Capitalization period: January 1, 2019, to June 30, 2020 • Expenditures on project: 2019: 2020:…

A: The questions asked about the amount of capitalized interest and depreciation. Borrowing cost: The…

Q: During the year 2020, Akasia Maju Bhd (AMB) purchased a piece of land with an existing building for…

A: The MFRS 116 stand for Malaysian Financial Reporting Standard. The goal of this Standard seems to be…

Q: Equipment January 1, 2019 $300,000 3,000 units Units of activity

A: As per our protocol we provide solution to the one question only and you have asked multiple…

Q: The following data apply to a non-current asset: £ Net realisable value…

A: Given: Net realizable value 5,000 Historic…

Q: ta Company is constructing a production complex that qualifies for interest capitalization. The…

A: The computation of the amount of interest cost capitalized of 2019 and 2020 is shown below:-…

Q: 17. If property that earns a net operating income of $45,000 is assigned a capitalization rate of…

A: Net Operating Income = $45,000Capitalization rate = 11.4%Market Value = ?

Q: the property factor, leased property is generally valued at

A: A lease is an agreement to use an asset of another party for a fixed period of time in exchange for…

Q: . PEARS Company owned three investment properties. Details of the properties are as follows: (Refer…

A: Answer A.

Q: A company buys a Platform for $800,000 on January 1, 2019. The life of the rig is 10 years and the…

A: Dismantling cost is the cost which are to be incurred in connection with the restoration of the…

Q: On 1/1/2020 you have purchased an asset with for $50,000. You estimate the useful life to be 5 years…

A: The straight line method is a way of depreciating assets. It is a method of allocating the cost of…

Q: In 2021, Boomer Co. finalized plans to expand operations. The first stage was completed on March 28…

Q: an item is capitalized why do you think different depreciation methods are allowed? Does the…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: ose that in addition to the $67,299 annual rental payments, Kimberly-Clark is also required to pay…

A: A lessee's power to use a leased item, often property or equipment, for the duration of a lease term…

Q: 10) In 2011, the Denim Company bought land that cost $15,000. In 2019, a similar piece of land was…

A: Depreciable assets are those assets whose value gets decrease over the life of the asset due to its…

Q: An asset used in a 4-year project falls in the 5-year MACRS class for tax purposes. The asset has an…

A: Original cost of asset = $9,300,000 Sale price of asset = $2,760,000 Tax rate = 0.22 or 22% Asset…

Q: Compute for the following (show solution): a. How much total profit should Technocraft recognize for…

A: Profit from lease for the lessor is equal to the difference between the market lease rentals and the…

Q: Years Purchase Price Unleveraged Cash Flow Resale Price Total CF (12,000,000) (12,000,000) 0 1…

A: Present value refers to the discounted future value or cash flows when discounted with the cost of…

Q: An investor is considering an investment property, but will only pay the price that will result in…

A: IRR means Internal rate of return.It is the rate of return at which present value of cash inflows is…

Concept explainers

Real Estate

Real estate means ownership of land along with the assets and natural resources that exist on the land. These properties are in real/physical form which is tangible. Real estate simply means land or addition made to land permanently like constructing a residence or different buildings. People invest in real estate to either reside or for wealth creation. Many people investing in real estate further lend the place for occupation or businesses in return for a monthly payment.

Question

Each property had an estimated useful life of 50 years. The accounting policy is to use the fair value model for investment properties. What is the carrying value of the investment properties that should be presented in the 2020 statement of financial position?

Fair Value
Fair Value
Initial Cost
December 31, 2019
December 31, 2020
P 2,700,000
P 3,200,000
Property 1
Property 2
Property 3
P 3,500,000
2,800,000
3,400,000
3,450,000
3,000,000
3,300,000
3,900,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

An investor is considering an investment property, but will only pay the price that will result in their desired IRR, given expected cash flows. The property is expected to generate the following cash flows from operations: year 1: $12.000; year 2: $12,600, year 3: $13,230, and year 4: $13,890. Assume that at the end of year 4, the property could be sold to net $190,000. What price must an investor offer to receive an expected IRR of 10%? O $139,518 o $153,396 o $159,752 o $145,254 o $170,522
a. Identify the following transactions as either Capital Expenditure or RevenueExpenditure.i). Pay salary and wages for November 2020 amounting to RM6,200.ii). Purchase vehicle for business use amounting to RM145,000.iii). Depreciation expense for financial year ended 2020 amounting to RM21,000.iv). Purchase stationery for office use amounting to RM450.v). Acquire a building amounting to RM520,000.vi). Repair office door amounting to RM800.
The acquisition price of a property is $380,000. The loan amount is $285,000. If the property’s NOI is expected to be $22,560, operating expenses $12,250, and the annual debt service $19,987, the debt coverage ratio (DCR) is approximately equal to
*attached is the problem REQUIRED: choose the letter What is the interest expense for 2020? a. 200,000b. 115,200c. 106,720d. 0 What is the depreciation for 2020? a. 135,200b. 115,200c. 67,600d. 20,000
An asset used in a 4-year project falls in the 5-year MACRS class (MACRS Table) for tax purposes. The asset has an acquisition cost of $18,720,000 and will be sold for $4,160,000 at the end of the project. If the tax rate is 22 percent, what is the aftertax salvage value of the asset?
Consider a 5-year MACRS property asset with an installed and “made ready for use” cost basis of $100. (Note: The $100 value used here is for illustration purposes in developing the rates. One would not depreciate an asset with a cost basis of only $100.) Develop the MACRS percentage rates (rt) for the asset based on the underlying depreciation methods.
(a) Provide a definition of the deprival value of an asset. (b) For a particular asset, suppose the three bases of valuation relevant to the calculation of its deprival value are (in thousands of pounds): £12, £10 and £8. Construct a matrix of columns and rows showing all the possible alternative situ- ations and, in each case, indicate the appropriate deprival value. (c) Justify the use of deprival value as a method of asset valuation, using the matrix in (b) above to illustrate your answer. ACCA Level 2, The Regulatory Framework of Accounting, December 1988
Which of the following is NOT a requirement for an investment to be classified as “held for sale”? a. A buyer or potential buyer has been located. b. The asset is expected to be sold within a year. c. There is a committed plan by management to sell. d. The asset must be marketed at a reasonable price.
1.3)KK Limited owns a property that is used as its head office in Pretoria. On 1st January 2020, itscarrying value was R20 million and its remaining useful life was 20 years. On 1st July 2020, thebusiness recognized cheaper premises found for use as the head office. It was therefore decidedto lease the property under an operating lease. The property was valued by a qualifiedprofessional who assessed the property’s value as R21 million on 1st July and R21.6 million on31st December 2020. Explain the accounting treatment of the property in the financialstatements for the year ended 31st December 2020. Income statement already included below...SOP required Income statement: Calculation of carrying amount of property as on 1st July:- Particular amount Carrying amount as on 1st July $20 million Remaining life 20 years Depreciation ($20/20 years) 1 million per year Depreciation from 1st January to 1st July: Depreciation for 6 month 0.50 million Carrying value of…
(a) What is the weighted average of accumulated expenditures? (b) What is the avoidable interest for the building in 2018?
h
An investor is considering an investment property, but will only pay the price that will result in their desired IRR, given expected cash flows. The property is expected to generate the following cash flows from operations: year 1: $12.000; year 2: $12,600, year 3: $13,230, and year 4: $13,890. Assume that at the end of year 4, the property could be sold to net $190,000. What price must an investor offer to receive an expected IRR of 10%? (a) $139,518 (b)$153,396 (c) $159,752 (d) $145,254 (e) $170,522