Pioneer Property Corporation owns and holds several property leases. items that are held for rent to retail entities under operating In July 2022, the entity transferred its marketing and other administrative operations to Pasig City and decided to lease under operating leases, the spaces in the Pioneer Building that was previously occupied for use in its operations. On January 2, 2022, the Pioneer Building had a carrying value of P4,000,000, (with cost of P8,200,000). The fair value on July 1, 2022, determined through an independent appraisal, was P5,000,000. Pioneer Building. The corporation records annual depreciation of P200,000 on the Pioneer Property Corporation uses the fair value model to account for its investment property. REQUIRED: Prepare the necessary entries in 2022 as a result of the foregoing.

Pioneer Property Corporation owns and holds several property leases. items that are held for rent to retail entities under operating In July 2022, the entity transferred its marketing and other administrative operations to Pasig City and decided to lease under operating leases, the spaces in the Pioneer Building that was previously occupied for use in its operations. On January 2, 2022, the Pioneer Building had a carrying value of P4,000,000, (with cost of P8,200,000). The fair value on July 1, 2022, determined through an independent appraisal, was P5,000,000. Pioneer Building. The corporation records annual depreciation of P200,000 on the Pioneer Property Corporation uses the fair value model to account for its investment property. REQUIRED: Prepare the necessary entries in 2022 as a result of the foregoing.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Prepare a schedule showing the intangible assets section of Cheyenne's balance sheet at December 31, 2020. CHEYENNE CORPORATION Intangible Assets Prepare a schedule showing all expenses resulting from the transactions that would appear on Cheyenne's income statement for the year ended December 31, 2020. CHEYENNE CORPORATION Expenses Resulting from Selected Intangible Assets Transactions < <
The property had been acquired on January 1, 2020 for a total of P7,600,000, made up of P6,900,000 paid to the vendor, P300,000 paid to the local authority as a property transfer reporting period. One investment property had a fair value investment property is fair value model at the end of each Paradise Company's accounting policy with respéct to reporting period. One investment property had a fair ch of P8,000,000 on December 31, 2020. The property had been acquired on January 1, 2020 for a tota of P7,600,000, made up of P6,900,000 paid to the vendo tax and P400,000 paid to professional advisers. The use life of the property is 40 years. What is the gain to be recognized for 2020 in respect of the investment property?
On April 1, 20x1, ESCULENT EDIBLE Co. purchased land and building by paying ₱40,000,000 and assuming a mortgage of ₱8,000,000. The land and building have appraised values of ₱20,000,000 and ₱40,000,000, respectively. The building will be used by ESCULENT Co. as its new office. Additional costs relating to the purchase include the following: Legal cost of conveying and registering title to land ₱32,000 Payment to tenants to vacate premises 36,000 Option paid on the land and building 24,000 Option paid on similar land and building not acquired 12,000 Broker's fee on the land and building 60,000 Unpaid real estate taxes prior to April 1, 20x1 assumed by ESCULENT Co. - assessed on land 120,000 Real estate taxes after April 1, 20x1 80,000 Repairs and renovation costs before the building is occupied 160,000 Repair costs after the building is occupied 200,000 * How much is the cost of the land? a. 16,192,000 b. 17,292,000 c. 15,492,000 d. 14,592,000 * How much is the cost of the building?…
Information concerning Tully Corporation's intangible assets is asfollows:a. On January 1, 2019, Tully signed an agreement to operate as afranchisee of Rapid Copy Service Inc. for an initial franchise fee of$85,000. Of this amount, $25,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $15,000each beginning January 1, 2020. The agreement provides that thedown payment is not refundable and no future services arerequired of the franchisor. The present value at January 2, 2019, ofthe 4 annual payments discounted at 14% (the implicit rate for a loan of this type) is $43,700. The agreement also provides that 5%of the revenue from the franchise must be paid to the franchisorannually. Tully's revenue from the franchise for 2019 was $900,000.Tully estimates the useful life of the franchise to be 10 years. b. Tully incurred $78,000 of experimental and development costs inits laboratory to develop a patent, which was granted on January 2, 2019. Legal…
Information concerning Adnan Corporation’s intangible assets is as follows. (a) On January 1, 2019, Adnan signed an agreement to operate as a franchisee of Hamed Copy Service, Inc. for an initial franchise fee of R$95,000. Of this amount, R$19,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of R$19,000 each, beginning January 1, 2020. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 1, 2019, of the 4 annual payments discounted at 14% (the implicit rate for a loan of this type) is R$55,350. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Adnan estimates the useful life of the franchise to be 10 years. (b) Adnan incurred R$85,000 of experimental and development costs in its laboratory to develop a patent that was granted on January 2, 2019. Legal fees and other costs associated with…
Information concerning Blue Corporation’s intangible assets is as follows. 1. On January 1, 2020, Blue signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $57,500. Of this amount, $11,500 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $11,500 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable, and no future services are required of the franchisor. The present value at January 1, 2020, of the 4 annual payments discounted at 10% (the implicit rate for a loan of this type) is $36,450. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Blue’s revenue from the franchise for 2020 was $840,000. Blue estimates the useful life of the franchise to be 10 years. (Hint: You may want to refer to Chapter 18 to determine the proper accounting treatment for the franchise fee and payments.)…
Information concerning Blue Corporation's intangible assets is as follows. On January 1, 2025, Blue signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $100,000. Of this amount, $20,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $20,000 each, beginning January 1, 2026. The agreement provides that the down payment is not refundable and no future services are required f the franchisor. The present value at January 1, 2025, of the 4 annual payments discounted at 15% (the implicit rate for a loan of this type) is $57,100. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Blue's revenue from the franchise for 2025 was $870,000. Blue estimates the useful life of the franchise to be 10 years. (Hint: You may want to refer to Chapter 18 to determine the proper accounting treatment for the franchise fee and payments.) Blue incurred…
Information concerning Cheyenne Corporation’s intangible assets is as follows. 1. On January 1, 2020, Cheyenne signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $50,000. Of this amount, $10,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $10,000 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 1, 2020, of the 4 annual payments discounted at 10% (the implicit rate for a loan of this type) is $31,700. The agreement also provides that 4% of the revenue from the franchise must be paid to the franchisor annually. Cheyenne’s revenue from the franchise for 2020 was $900,000. Cheyenne estimates the useful life of the franchise to be 10 years. (Hint:You may want to refer to Chapter 18 to determine the proper accounting treatment for the franchise fee and…
Information concerning Sandro Corporation's intangible assets is as follows. 1. On January 1, 2020, Sandro signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $75,000. Of this amount, $15,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $15,000 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 1, 2020, of the 4 annual payments discounted at 14% (the implicit rate for a loan of this type) is $43,700. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Sandro's revenue from the franchise for 2020 was $900,000. Sandro estimates the useful life of the franchise to be 10 years. (Hint: You may want to refer to Chapter 18 to determine the proper accounting treatment for the franchise fee and payments.) 2.…
Information concerning Haengbok's intangible assets is as follows. 1. On January 1, 2019, Haengbok signed an agreement to operate as a franchisee of CHIR DAK for an initial franchise fee of $150,000. Of this amount, $30,000 was paid when the agreement was signed, and the balance is payable in annual payments of $30,000 each, beginning January 1, 2020. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 1, 2019, of the four annual payments discounted at 14% (the implicit rate for a loan of this type) is $87,400. Haengbok estimates the useful life of the franchise to be 10 years. 2. Haengbok incurred $130,000 of experimental and development costs in its laboratory to develop a patent that was granted on January 2, 2019. Legal fees and other costs associated with registration of the patent totaled $35,200. Haengbok estimates that the useful life of the patent will be 8 years. The patent has yet…
Pioneer Property Corporntion owns und holds scveral property itoms that are held for ront to retail antitics undor opcruting leasc8. In July 2019, the entity tranaferred its marketing and other udministrative oporations to Panig City and decided to lcase the Rainbow Building spaccs under opcrating leascs. On January 2. 2019, the Rainbow Building had a carrying value of P4,000,000, (with cost of P8,200,000), The fair value on July 1, 2019, determincd through an indcpendent appraisol, was P5,000,000. The corporation records annual depreciation of P200,000 on the Rainbow Building. Pioncer Property Corporation uses thc fair value modcl to account ſor its investmcnt propcrty. REQUIRED: Prepare the necessary entries in 2019 as a result of the foragoing.
Hawks Corporation’s Property, Plant and Equipment section of its statement of financial position as of December 31, 2019 included the following: Land P 400,000 Buildings 3,200,000 The following transactions occurred during 2020: Land site number 102 was acquired for P4,000,000. Additionally, to acquire the land the entity paid a P240,000 commission to a real estate agent. Costs of P60,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P20,000. A second tract of land (site number 103) with a building was acquired for P1,200,000. Based on reliable information at the time of acquisition, fair value of land is P800,000 and the building P400,000. Shortly after acquisition, the building was demolished at a cost of P120,000. A new building was constructed for P1,600,000 plus the following costs: Excavation fees P 44,000 Architectural design fees 32,000 Building permit…