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Compute the cost of self-constructed investment property

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Reference no: EM132968002

PROBLEM 1 - Jianyu Company acquired a building through finance lease. The building is to be rented out under various operating leases. The present value of minimum lease payments is P2,800,000 while its fair value is P3,000,000.

Required - Prepare the necessary journal entries on the date of recognition of investment property.

PROBLEM 2 - The following costs were incurred by Shawn Company in the construction of its building to be used as an investment property:

Labor in construction - P1,000,000

Materials used in construction 1,500,000

Abnormal amount of wasted material - 300,000

Overhead attributable for the construction - 750,000

Other directly attributable costs in the construction - 350,000

Required - Compute the cost of self-constructed investment property?

Reference no: EM132968002

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