Problem 14League Company owns three properties which are classified as investment properties.Details of the properties.InitialFair ValueFair Valuecost12/31/201512/31/20162,700,0003,450,0003,300,0003,200,000Property 1Property 2Property 33,050,0003,850,0003,500,0002,850,0003,600,000Each property was acquired in 2012 with a useful life of 25 years. The entity's accounting policy is to beuse the investment properties.What is the gain or loss to be recognized for the year ended December 31, 2016?a. 189,000 lossb. 150,000 lossc. 300,000 gaind. 450,000 lossProblem 15Ball Company purchased a P1,000,000 ordinary life insurance policy on its present. Ball Company is thebeneficiary under the life insurance policy. The policy year and Ball's accounting year coincide. Additionaldata available for the year ended December 31, 2018 are as follows:43,500Cash surrender value, January 1Cash surrender value, December 31Annual advance premium paid January 1Dividend received July 154,00020,0003,000What amount should be reported as life insurance expense for 2018?a. 6,500b. 9,50017,000d. 20,000C.

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Problem 14 League Company owns three properties which are classified as investment properties. Details of the properties. Initial Fair Value Fair Value cost 12/31/2015 12/31/2016 Property 1 Property 2 Property 3 2,700,000 3,200,000 3,500,000 3,450,000 3,050,000 2,850,000 3,300,000 3,850,000 3,600,000 Each property was acquired in 2012 with a useful life of 25 years. The entity's accounting policy is to be use the investment properties. What is the gain or loss to be recognized for the year ended December 31, 2016? a. 189,000 loss b. 150,000 loss C. 300,000 gain d. 450,000 loss

Problem 14 League Company owns three properties which are classified as investment properties. Details of the properties. Initial Fair Value Fair Value cost 12/31/2015 12/31/2016 Property 1 Property 2 Property 3 2,700,000 3,200,000 3,500,000 3,450,000 3,050,000 2,850,000 3,300,000 3,850,000 3,600,000 Each property was acquired in 2012 with a useful life of 25 years. The entity's accounting policy is to be use the investment properties. What is the gain or loss to be recognized for the year ended December 31, 2016? a. 189,000 loss b. 150,000 loss C. 300,000 gain d. 450,000 loss

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 9C

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