Reference no: EM133006302
Problem - Roundtree Company reported the following information with respect to cost of goods sold for the current year:
Inventory - January 1 10,000 530,000
Purchases 45,000 2,790,000
Goods Available for Sale 55,000 3,320,000
Inventory - December 31 (15,000) (945,000)
Cost of Goods Sold 40,000 2,375,000
On January 1, 2019, the entity acquired land, building and equipment with fair value of P3,000,000 in exchange for 10,000 P100 par value ordinary shares and 3,000 P500 par preference shares. The market price of the shares at the time of acquisition was P120 for ordinary shares and P800 for preference shares. The fair value of the equipment was P300,000 while the land and building has an assessed value of P2,000,000 of which 60% can be traced to the value of land. The building has a useful life of eight years and the equipment four years.
The current cost per unit of inventory was P61 on January 1 and P75 on December 31. The land has a current replacement cost of P1,550,000 on December 31, 2019. The specific price index applicable to the building was 160 on January 1, 2019 and 200 on December 31, 2019 while for the equipment was 150 on January and 210 on December.
Required -
1. What is the realized holding gain to be reported for 2019?
2. What is the realized holding gain to be reported for 2019?