Reference no: EM132938893
Questions -
Q1. Sisig Corp. purchases a building with land at a cost of P100,000,000. In the sale and purchase agreement, P20,000,000 of the purchase price is attributed to the land. The building consists of 12 floors of equal space. Sisig also incurs the following costs in connection with the purchase of the property: legal and agency fees, P3,000,000; soft-launching cost to market for tenants; P500,000 and administrative expenses, P200,000. Assuming Sisig Corp. uses two floors or 20% of the entire building for administrative purposes, at what amount should the investment property be initially recognized?
Q2. On January 1, 2019, Sisig Corp. which uses the fair value model, purchases an investment property at a cost of P55,000,000. On December 31, 2019, the market value of the property is P60,000,000. The fair market value on December 31, 2020 is P50,000,000. On January 1, 2020, the property was reclassified to PPE. At what amount should the PPE be initially recorded?
Q3. Sisig Corp. purchases a building with land at a cost of P100,000,000. In the sale and purchase agreement, P20,000,000 of the purchase price is attributed to the land. The building consists of 12 floors of equal space. Sisig Corp. also incurs the following costs in connection with the purchase of the property: legal and agency fees, P3,000,000; soft-launching cost to market for tenants; P500,000 and administrative expenses, P200,000. Assuming Sisig Corp. cannot sell the floors separately and uses one-half of the ground floor or 5% of the entire building for administrative purposes, and the rest of the floor area are let out to tenants, at what amount the investment property should be initially recognized?
Q4. On April 30, 2020, Sisig Corp. classifies a property in Eastern Visayas as held for sale. The carrying amount of the property as of this date is P300,000,000 (cost of P400,000,000, accumulated depreciation of P60,000,000, and accumulated impairment loss of P40,000,000). The estimate of the fair value less cost to sell on this date is P280,000,000. On December 31, 2020, the estimate of the fair value less cost to sell is P350,000,000. The sudden increase in the fair value is attributed to the increase in demand in Eastern Visayas. What is the amount of impairment loss recovery on December 31, 2020?