21. Loveliness Company has a single investment property which had an original cost of P7,200,000 on January 1, 2023. On December 31, 2025, the fair value was P7,500,000 and on December 31, 2026, the fair value was P7,282,500. On acquisition, the property had a useful life of forty years. What is the gain or (loss) to be recognized in profit or loss for 2026 under the fair value model (FVM)? -82,500 d. 300,000 a. to by 2007,500 C. 217,500

21. Loveliness Company has a single investment property which had an original cost of P7,200,000 on January 1, 2023. On December 31, 2025, the fair value was P7,500,000 and on December 31, 2026, the fair value was P7,282,500. On acquisition, the property had a useful life of forty years. What is the gain or (loss) to be recognized in profit or loss for 2026 under the fair value model (FVM)? -82,500 d. 300,000 a. to by 2007,500 C. 217,500

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter17: Property Transactions: § 1231 And Recapture Provisions

Section: Chapter Questions

Problem 40P

See similar textbooks

Similar questions

Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?
Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of zero. Bliss uses the straight -line method of depreciation. At the beginning of the sixth year, the assets book value is 200,000 and Bliss changes the estimate of the assets life to 25 years, so that 20 years now remain in the assets life. Explain how this change will be accounted for in Blisss financial statements, and compute the current and future annual depreciation expense.
The following intangible assets were purchased by Goldstein Corporation: A. A patent with a remaining legal life of twelve years is bought, and Goldstein expects to be able to use it for seven years. B. A copyright with a remaining life of thirty years is purchased, and Goldstein expects to be able to use it for ten years. For each of these situations, determine the useful life over which Goldstein will amortize the intangible assets.
Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.
Ben Company purchased an investment property on January 1, 2020 at a cost of P250.000. The property had a useful life of 20 years and at December 31, 2022, had a fair value of P280.000.On January 1, 2023, the property was sold for net proceeds of P290,000. Ben uses the cost model to account for investment property.What is the gain or loss to be recognized in profit or loss for the year ended December 31,2023 regarding the disposal of the property, according to IAS 40 Investment Property? A. P77,500 gain B. P67,500 gain . C. P30,000gain D. PI 0,000 gain
The Lancer Company has a single investment property, which had original cost of P580,000 on January 1, 2020. At December 31, 2022, its fair value was P600.000 and at December 31, 2023, it had a fair value of P590,000. On acquisition, the property had a useful life of 40 years.According to IAS 40 Investment Property, what should be the expense recognized in Lancer's profit or loss for the year ending December 31, 2023 under each of the fair value model and the cost model? a. FV model - P14,750; Cost model- P14,500 b. FV model - P10,000; Cost model- P14,500 c. FV model - P14,500; Cost model- P10,000 d. FV model - P10,000; Cost model- P14,750
Jessie Company purchased an investment property on January 1, 2020 at a cost of P2,200,000. The property had a useful life of 40 years and on December 31, 2022 it had a fair value of P3,000,000. On December 31, 2022, the property was sold for net proceeds of P2,900,000. The entity used the cost model to account for investment property. What is the gain or loss to be recognized in 2022 regarding the disposal of the property? A. 865,000 gain B. 810,000 gain C. 100,000 loss D. 700,000 gain
ABC Compant purchased an investment property on July 1, 2016 for P4,200,000. The property had a useful life of 35 years and on December 31, 2021 had a fair valye of P3,000,000. On December 31, 2021, the property was sold for net proceeds of P3,100,000. The entity used the cost model to account for the investment property. How much is the gain (loss) to be recognized for the year ended December 31, 2021 regarding the disposal of the property. a. (540,000) b. 440,000 c. (100,000) d. (440,000)
Momo Company has a single investment property which had originally cost P2,320,000 on January 1, 2023.At December 31, 2023 its fair value was P2,040,000. On Acquisition, the property had a useful life of 40years. According to PAS 40 – Investment Property, what should be the expense recognized in Momo’sprofit or loss for the year ending December 31, 2023 under each of the fair value model and the costmodel?Fair value model Cost model Fair valuemodel Cost model A. 58,000 120,000 C. 58,000 106,000B. 62,000 120,000 D. 120,000 120,000
Keil Company has a single investment property which had an original cost of P5,800,000 on January 1, 2017. At December 31, 2019, the fair value was P6,000,000 and at December 31, 2020 the fair value was P5,900,000. On acquisition, the property had a useful life of 40 years. What should be the expense recognized in Keil Company's profit or loss for the year ended December 31, 2020 under the fair value model and the cost model? Fair Value Model Cost Model
Alabama Corp. acquired an investment property on January 2, 2022, at a total cost of P8 million. The property has a useful life of 25 years. Its fair value on December 31, 2022, is P9.6 million. The entity used the fair value model to account for its investment property. What is the depreciation expense to be recognized for the year 2022? a. 384,000 b. 0 c. 256,000 d. 320,000 What is the carrying amount of the investment property on December 31, 2022? a. 8,000,000 b. 9,216,000 c. 9,600,000 d. 7,680,000 What is the gain or loss on fair value change to be recognized for the year 2022? a. 1,600,000 b. 1,920,000 c. 1,536,000 d. 0