How much is the investment property recognized on january

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On January 1, 20x1, Horror Co. acquired a building costing ?1,200,000. Professional fees for legal services and property transfer taxes incurred on the acquisition amounted to ?50,000. Start up cost incurred amounted to ?20,000. Operating losses incurred before the planned level of occupancy of the building is achieved amounted to ?120,000. Materials, labor and overhead incurred for repairs and renovation of the property before it was put to leasable condition amounted to ?200,000. Abnormal amounts of wasted material, labor and other resources incurred in developing the property amounted to ?60,000. The renovation and repairs were completed on March 31, 20x1. The building has an estimated useful life of 10 years with no residual value. Horror Co. uses the cost model and the straight-line method of depreciation for its investment property. The building has a fair value of ?1,400,000 on December 31, 20x1.

Requirement:

Problem 1: How much is the investment property recognized on January 1, 20x1?

Reference no: EM132752674

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