EXERCISE 5

EXERCISE 1

BUILDING
Investment property 19, 379,500
Cash 19, 379,500
To record the investment property

Purchase price 18, 605, 000

Transaction cost 425, 500
305, 000
44, 000
Investment property P19, 379,500

Fair value 8, 855, 000

Acquisition Cost (P10, 405, 500)
Loss on change in fair value 2020 (1,550,500)

Investment property 1,550,500

Loss on change in fair value 1,550,500
To record the fair value change
Land, Fair value 8, 555, 000
Acquisition Cost (8, 974, 000)
Loss on change in fair value 2020 (₱419, 000)

Investment property 419, 000

Gain on change in fair value 419, 000
To record fair value change
Building, Fair value December 31, 2021 9,966, 000
Building, Fair value December 31, 2020 (8, 855, 000)
Gain on change in fair value ₱1, 111, 000

Land, fair value at Dec. 31, 2021 9, 900, 000

Land, fair value at Dec. 31, 2020 (8, 555, 000)
Gain on change in fair value ₱1, 345, 000

Investment property 1, 345, 000

Gain on change in fair value P1, 345, 000
To record fair value change.
EXERCISE 2

REQUIREMENT 1
SOLUTION:
Building fair value at dec 2022 8, 112, 000
building cost at jan. 2020 8, 888, 000
loss on change in fair value 176, 000

Journal entries in 2020

Investment property 8, 888, 000
cash 8, 888, 000
TO RECORD INVESTMENT PROPERTY AND EXPENSE
Loss on change in fair value 176, 000
investment property 176, 000
TO RECORD FAIR VALUE CHANGE
Journal entries for 2022
Investment property 8, 888, 000
cash 8, 888, 000
TO RECORD THE INVESTMENT PROPERTY AND EXPENSE
THE EXPENSE TO BE PRESENTED IN THE STATEMENT
IS ZER0.
Journal entries for 2020

Investment property 8, 888, 000

cash 8, 888,000
TO RECORD THE INVESTMENT PROPERTY REPAIRS
EXERCISE 3

Requirement 1:
14, 556, 000

Requirement 2:
22, 965, 000

Requirement 3:
Investment property 37, 521, 000
building 14, 556, 000
land 22, 965, 000

EXERCISE 4:

Cost 15, 650, 000

less: accumulated dep. 0
carrying amount 15, 650, 000

Fair value 9, 727, 000

less; change in fair value (5, 923, 000)
fair value 3, 804, 000
EXERCISE 5

Building fair value of December 31, 2021 127, 550, 000

building cosr of January 1, 2016 187, 000, 000
loss on change of fair value 57, 450, 000

EXERCISE 6
Cost 595, 000
Accumulated dep. (23, 800)
carrying amount 571, 200
less: fair value 707, 000
loss 135, 800

EXERCISE 7

Inventory 40, 485, 500

investment property 40, 485, 500
TO RECORD THE PROPERTY RECLASSIFICATION

Investment property 40, 485, 500

residual value 2, 485, 500
building 42, 970, 500
TO RECORD THE BUILDING RECLASSIFICATION
EXERCISE 8

Cost model
investment property
cash

Depreciation expense
accumulated dep.
TO RECORD DEPRECIATION