Erica Company had the following property acquisitions1. Acquired a tract of land in exchange for 50,000 ordinaryThe last property tax bill indicated assessed value ofshares with P100 par value and market price of P120 perPROBLEMSPrProblem 23-1 (IAA)20during the current year:apershare on the date of acquisition.P4,500,000 for the land.2. Received land from a major shareholder as an inducementto locate a plant in the city.No payment was required but the entity paid P50,000 forlegal expenses for land transfer. The land is fairly valuedat P1,000,000.3. Purchased for P5,500,000, including appraiser fee ofP100,000´a warehouse building and the land on which itis located.The land had an appraised value of P2,000,000 and originalcost of P1,400,000. The building had an appraised valueof P3,000,000 and original cost of P2,500,000.4. Purchased an office building and the land on which it islocated for P7,500,000 cash and assumed an existingP2,500,000 mortgage.For realty tax purposes, the property is assessed atP9,600,000, 60% of which is allocated to building.Required:Prepare journal entries to record the transactions for thecurrent year.650

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Prepare journal entries to record the transactions for the current year.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter7: Property Transactions: Basis, Gain And Loss, And Nontaxable Exchanges

Section: Chapter Questions

Problem 32P

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