UY, MIA FE

Investment Property and Fund and Other Investments

1. Gain
2. Revaluation
3. Gain from change in Fair Value
4. Carrying Amount
5. Income
6. Gain
7. Fair Value model
8. Cost Model
9. Investment Property
10. Change of use
11. False
12. False
13. Trye
14. True
15. False
16. False

Let’s Analyze
Activity 1 (ULO c)
Exercise 1
a. 4,400,000/40 = 110,000 * 3 = 330,000
Net proceeds 5,800,000
Carrying amount (4,400,000-330,000) (4,070,000)
Gain on disposal 1,730,000

b. Cost Model entry upon disposal

Cash 5,800,000
Acc. Depreciation 330,000
Investment Property 4,400,000
Gain on disposal 1,730,000

FV model entry upon disposal

Cash 5,800,000
Loss on Disposal 200,000
Investment Property 6,000,000
 Exercise 2

A. Cost Model B. Revaluation Model

20A
Investment property 80,000,000
Cash 20A
80,000,000 Investment property 80,000,000
Cash 80,000,000
Depreciation Expense 2,880,000
Accumulated Depreciation Investment property 8,000,000
2,880,000 Gain from change in FV 8,000,000

20B 20B
Depreciation Expense 2,880,000 Loss from change in FV 3,200,000
Accumulated Depreciation Investment property 3,200,000
2,880,000
20C
Investment property 11,200,000
20C
Gain from change in FV 11,200,000
Depreciation Expense 2,880,000
Accumulated Depreciation
2,880,000

Exercise 3
Cost Model Fair Value Model
Depreciation Expense 290,000 Loss from change in FV 200,000
Accumulated Depreciation 290,000 Investment Property 200,000

In a Nutshell
Since FV model is used, the carrying amount on December 31, 20B is equal to its FV at
that date which is 9,090,000.
And, the balance on December 31, 20C shall be its FV at that date which is 8,955,000.
FUND AND OTHER INVESTMENTS

Let’s Check

Activity 1. (ULO e)

Identification

1. Cash surrender value

2. Restricted Cash
3. Life Insurance Policy
4. Retained earnings
5. Year end adjustment
6. Sinking Fund
7. Sinking Fund
8. Insurance expense
9. Gain on life insurance
10. Preference share redemption fund

True or False

1. True
2. False
3. True
4. False
5. True
6. False
7. True
Let’s Analyze
Activity 1

Exercise1 (ULO f)

2017
3,510,00
1-Jan Sinking Fund Cash 0
3,510,00
Cash 0

3,250,00
18-Jan Sinking Fund Securities 0
3,250,00
Sinking Fund Cash 0

5-Jul Sinking Fund Expenses 130,000

Sinking Fund Cash 130,000

9-Sep Sinking Fund Cash 689,000

Loss on Sale of Securities 91,000
Sinking Fund Securities 780,000

20-Dec Sinking Fund Cash 195,000

Sinking Fund Income 195,000

2018
12-Feb No entry

31-Dec Sinking Fund Cash 270,000

Sinking Fund Securities 270,000

2,250,00
31-Dec Sinking Fund Cash 0
Loss on Sale of Securities 220,000
2,470,00
Sinking Fund Securities 0

3,000,00
31-Dec Bonds Payable 0
3,000,00
Sinking Fund Securities 0

31-Dec Cash 534,000

Sinking Fund Cash 534,000
Exercise 2

1,600,00
1 Sinking Fund - Trustee 0
1,600,00
Cash 0
2 No entry
3 No entry
4 No entry
5 No entry
6 Sinking Fund - Trustee 824,000
Sinking Fund Expense 48,000
Sinking Fund Income 112,000
Gain of Sale of
Securities 760,000
1,600,00
7 Bonds Payable 0
Interest Payable 160,000
1,760,00
Sinking Fund - Trustee 0
8 Cash 664,000
Sinking Fund - Trustee 664,000

Exercise 3

A.
Date Interest Fund Balance Annual Contribution Fund Balance
July 11, 20A 603,318 603,318
July 11, 20B 69,332 603,318 1,266,968
July 11, 20C 126,697 603,318 1,996,983
July 11, 20D 199,699 603,318 2,800,000

B.
Date Interest Fund Balance Annual Contribution Fund Balance
June 30, 20B 548,471 548,471
June 30, 20C 54,847 548,471 1,151,789
June 30, 20D 115,179 548,471 1,815,439
June 30, 20E 181,544 548,471 2,545,454
June 30, 20F 254,546 548,471 2,800,000
 c.
Date Interest Fund Balance Fund Balance
July 11, 20A 1,912,438
July 11, 20B 191,244 2,103,682
July 11, 20C 210,368 2,314,050
July 11, 20D 231,405 2,545,455
July 11, 20E 254,545 2,800,000

Exercise 4

1-Jan Preference share redemption fund 1,500,000

1,500,00
Cash 0
Contingency Fund 750,000
Cash 750,000
Insurance Fund 9,000,000
9,000,00
Cash 0

1-Jul Fire loss 4,500,000

Acc. Depreciation 3,000,000
7,500,00
Building 0

12,000,00
Building 0
9,000,00
Insurance Fund 0
3,000,00
Cash 0

15-Dec Loss on Danger 750,000

Contingency Fund 750,000

31-Dec Preference Share Capital 1,500,000

] Retained Earnings 90,000
Preference share redemption 1,500,00
fund 0
Cash 90,000
Exercise 5

April 1, 20B Life Insurance 72,000

Cash

Life Insurance 72,000

Cash 72,000

Life Insurance 72,000

Cash 72,000

Cash Surrender Value 72,000

Life Insurance 26,000
Retained Earnings 48,000
20E
1-Apr Life Insurance 72,000
Cash 72,000

Cash Surrender Value 28,800

Life Insurance expense 28,800
20F
1-Apr Life Insurance Expense 72,000
Cash 72,000

1-Jul Cash Surrender Value 19,200

Life Insurance expense 19,200

2,000,00
31-Jul Cash 0
Cash surrender value 120,000
 Life Insurance expense 36,000
Gain on Life insurance 1,844,00
settlement 0

In A Nutshell

To get a business started, you'll need money. A business that does not have good funding sources will
drown in debt. Funding is like fuel that drives a business forward. Sources of funds are like fuel to the
growth of every business. When a business begins to grow, funds are required. The fund is essential to
operate a business. The funds will be used for inventory and expenses such as rent, insurance, salaries,
utilities, miscellaneous, and depreciation. It will help the financial performance of a business. 

In our personal life, funding allows us to live for a few months if something unexpected comes up. It is a
big help for our financial situation. It supports us in achieving our life's goals by providing support.