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Batangas State UniversityABMABM 001An undertaking can choose either the cost model or the
revaluation model as its
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Course Title
ABM 001
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maeangelailao
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17.An undertaking can choose either the cost model or the revaluation model, as its accounting policy
for investment property. It must apply the chosen model to:a.All investment property b.All fixed assets
c.Major assets d.All of the above18.Mega Company and its subsidiaries have provided you with a list of
property items then own: i.Land held by Mega for undetermined use future use –P10 million ii.A vacant
building owned by Mega and to be leased out under an operating lease –P20 million iii.Property held by
a subsidiary of Mega, a real estate firm in the ordinary course of business - P50 million iv.Property held
by Mega for use in production –P12 million v.A hotel owned by Mega’s subsidiary; the subsidiary also
provides security services to its guests –P60 million vi.A building owned by Mega being lease out to
Vega, one of Mega’s subsidiaries under operating leases –P25 million What amount shall be shown as
investment property in the consolidated statement of financial position of Mega and its subsidiaries?
19.Sachi Company had a property with a carrying amount of P15,000,000 held for sale in the ordinary
course of business. On August 1, 2016, Sachi commence an operating lease with Sanjo Company; hence,
the property was reclassified from inventory to investment property. The fair value of this property on
August 1, 2016 was P20,000,000 with cost to sell estimated at P1,000,000. If the investment property
will be carried at fair value, what is the amount revaluation to be recognized in profit or loss in Sachi’s
2016 statement of comprehensive income as a result of this reclassification?20.The Emem Company
acquired a building January 1, 2016 for P18,000,000. At that date, the building has a useful life of 40
years. The fair value of the building was P20,000,000 at December 31, 2016. The building was
appropriately classified as investment property and accounted for using the cost model. What amounts
shall the be presented on the statement of financial position at December 31, 2016 and recognized in
profit or loss for the year then ended respectively?21.The Beyonce Company acquired a building on
January 1, 2016 for P18,000,000. At that date, the building had a useful life of 40 years. The fair value of
the building was P20,000,000 at December 31,2016.The building was appropriately classified
asinvestment property and accounted for using thefair value model.What amounts shall be presented in
the statementof financial position at December 31, 2016 andrecognized in profit or loss for the year
then endedrespectively?a.P20,000,000 and P0 b.P18,000,000 and P0 c.P20,000,000 and gain of
P2,000,000 d.P17,550,000 and expense of P450,000-End-
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Summer '19
PROFESSOR
Ginny Potter
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Report
FAR.118_SHARHOLDERS-EQUITY.pdf
FAR.115_INTANGIBLE-ASSETS-with-answer.pdf
FAR.116_CURRENT-LIABILITIES-PROVISIONS-AND-CONTINGENCIES.pdf
12
FAR.111_INVESTMENT-IN-EQUITY-SECURITIES-AND-DEBT-SECURITIES-with-answer.pdf
12
EXECUTIVE SUMMARY.docx
3
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FAR.113_INVESTMENT-PROPERTY-with-answer.pdf
ABM 001
FAR.113_INVESTMENT-PROPERTY-with-answer.pdf
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THE_LAW_ON_SALES_AGENCY_AND_CREDIT_TRANS.docx
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Roallos Alicia-PAS-40.pptx
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ADMI-860_2_A.pdf
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