1. a.

Calculation and Presentation for Property 1:

(a) Land:
• Land Acquisition Cost: $50,000 (given)
• Fair Value of Land per December 31, 2023: $65,000 (given)
Presentation in Boy's Statement of Financial Position: Land: $65,000
(b) Building:
• Construction Cost: $330,000 (given)
• Accumulated Depreciation: The building was completed in December 2022 and has
been in use for 1 year by December 31, 2023. Depreciation expense per year =
Construction Cost / Estimated Useful Life Depreciation expense = $330,000 / 30 =
$11,000 per year Accumulated Depreciation = Depreciation expense * Number of Years
= $11,000 * 1 = $11,000
• Fair Value of Building per December 31, 2023: $510,000 (given)
Presentation in Boy's Statement of Financial Position: Building: $510,000 Less: Accumulated
Depreciation: ($11,000) Net Carrying Value: $499,000
Calculation and Presentation for Property 2:
(a) Land:
• Land Acquisition Cost: $85,000 (given)
• Fair Value of Land per December 31, 2023: $105,000 (given)
Presentation in Boy's Statement of Financial Position: Land: $105,000
(b) Building:
• Construction Cost: $280,000 (given)
• Accumulated Depreciation: The building was completed in June 2022 and has been in
use for 1.5 years by December 31, 2023. Depreciation expense per year = Construction
Cost / Estimated Useful Life Depreciation expense = $280,000 / 25 = $11,200 per year
Accumulated Depreciation = Depreciation expense * Number of Years = $11,200 * 1.5 =
$16,800
• Fair Value of Building per December 31, 2023: $360,000 (given)
Presentation in Boy's Statement of Financial Position: Building: $360,000 Less: Accumulated
Depreciation: ($16,800) Net Carrying Value: $343,200
b. Explanation of Boy's Application of Accounting Standards:
For Property 1, Boy Real Estate Ltd. correctly adopts the cost model in PSAK 16 for fixed
assets. They present the land at its fair value per December 31, 2023, which is in line with the
cost model. The building is also presented at its net carrying value, considering the accumulated
depreciation.
For Property 2, Boy Real Estate Ltd. correctly applies the fair value model in PSAK 13 for
investment properties. They present both the land and building at their respective fair values per
December 31, 2023. However, it's important to note that only the building is treated as an
investment property, while the land is still classified as a fixed asset.
In summary, Boy Real Estate Ltd. correctly applies the accounting standards for both properties,
presenting the land and building based on their respective models (cost model for Property 1
and fair value model for Property 2).