What is the depreciation of the investment property

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1. What is the depreciation of the investment property and accountedfor 2016?a. 300,000b. 320,000c. 330,000d. 0
2. What is the carrying amount of the investment property onDecember 31, 2017?
Answer 1: ADepreciation for 2016 9,000,000/30300,000Answer 2: ACost- 1/1/169,000,000Accumulated depreciation 9M/30 x 2(600,000)Carrying amounts- 12/31/178,400,000Problem 6
On January 1, 2014, Crosswind Company owned an investmentproperty which had an original cost of 5,800,000 and useful life of 40years.On December 31, 2016, the fair value was 6,000,000 and onDecember 31, 2017, the fair value was 5,900,000.1. Under the fair value model, what is the expense to be recognize forthe year ended December 31, 2017?
2. Under the cost model, what is the expense to be recognized for theyear ended December 31, 2017?a. 145,000b. 150,000c. 147,500d. 0
Answer 1: BFair value modelFair value- 12/31/175,900,000Fair value- 12/31/166,000,000Loss from change in fair value(100,000)Answer 2: ACost modelDepreciation expense for 2017 (5,800,000/40)145,000
Problem 7Paradise Company’s accounting policy with respect to investmentproperty is to measure the property at fair value at the end of eachreporting period.
The property had been acquired on January 1, 2016 for a total of7,600,000, made up of 6,900,000 paid to the vendor, 300,000 paid tothe local authority as a property transfer tax and 400,000 paid toprofessional advisers.The useful life of the property is 40 years.What is the amount of gain to be recognized in profit or loss for theyear ended December 31, 2016 in respect of the investment property?
Answer: A
FV8,000,000Acquisition cost7,600,000Gain from change in fair value400,000Payment to vendor6,900,000Property transfer tax300,000Problem 8
Rhino Company, a real estate entity, had a building with a carryingamount of 20,000,000 on December 31, 2016. The building was usedas offices of the entity’s administrative staff.On December 31, 2016, the entity intended to rent out the building toindependent third parties. The staff will be moved to a new buildingpurchased early in 2016.On December 31, 2016, the original building had a fair value of35,000,000.On December 31, 2016, the entity also had land that was held for salein the ordinary course of business.The land had a carrying amount of 10,000,000 and fair value of15,000,000 on December 31, 2016.On such date, the entity decided to hold the land for capitalappreciation.The accounting policy is to carry all investment property at fair value.1. On December 31, 2016, what amount should be recognized inrevaluation surplus as a result of transfer of the building toinvestment property?

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Term
Winter
Professor
MRS.PALLARCA
Tags
1966, 1981, 1986, 1971, 1973, 1970

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