Reference no: EM132932684
PROBLEM - On January 1, 2021, JEFFORDS CORP. bought a piece of land worth Php 2,600,000. JEFFORDS' business model is to buy and sell the land. On February 1, 2024, JEFFORDS decided to lease the land under an operating lease to another company. The relevant estimated selling price and cost to sell of the inventories is as follows:
Selling price:
2,650,000 - 12/31/2021
2,750,000 - 12/31/2022
2,800,000 - 12/31/2023
2,880,000 - 12/31/2024
Cost to sell:
150,000- 12/31/2021
120,000 - 12/31/2022
100,000 - 12/31/2023
130,000 - 12/31/2024
Required - Answer the following:
A. What is the carrying amount of the inventory as of December 31, 2023 statement of financial position?
B. How much should be initially recorded as cost of the investment property if it will be accounted using the cost model?
C. How much is the gain on transfer to be recognized if the investment property will be accounted using the cost model?
D. How much should be initially recorded as cost of the investment property if it will be accounted using the fair value model?
E. How much is the gain on transfer to be recognized if the investment property will be accounted using the fair value model?