Paez Glenda A

19-51633

1. What is the total cost of land?

a. 9,160,000
b. 8,560,000
c. 9,000,000
d. 8,660,000

Solution: Initial Cost of Land (2,000,000/5,000,000)(5400,000) = Php 2,160,000

(7,500,000 +2,500,000) *40% = 4,000,000
(25,000 shares * 120 3,000,000
Php 9,160,000

2. What is the total cost of building?

a. 8,760,000
b. 9,240,000
c. 9,000,000
d. 7,760,000

Solution: Initial Assessment on Land (3,000,000/5,000,000)(5400,000) = Php 3,240,000

(7,500,000+2,500,000) *60% = 6,000,000
Php 9,240,000

3. The increase in the equipment account as a result of the above transactions would be
a. 4,900,000
b. 5,000,000
c. 5,100,000
d. 5,200,000

Solution: June 10
Invoice Price Php 3,000,000
Discount Taken (150,000)
Installation Cost 200,000
Freight and Insurance 50,400 Php 3, 100, 000

November 12
Invoice Price 2,000,000
Discount not Taken 200,000 2,100,000
Total Cost Php 5,100,000
4. What is the total investment property that should be reported in the consolidated statement of
financial position of the parent and its subsidiaries?
a. 12,000,000
b. 15,500,000
c. 10,500,000
d. 9,500,000

Solution:
Land Held by Eragon Php 5,00,000
Vacant Building to be leased out 3,000,000
Building Owned 1,1500,000
Property under Construction 6,000,000
Total Investment Property 15,500,000

5. What total amount should be included in property, plant and equipment in the consolidated
statement of financial position?
a. 11,000,000
b. 13,000,000
c. 10,500,000
d. 8,500,000

Solution:
Property held by Eragon-Production Php 4,000,000
Land leased by parent to subsidiary 2,500,000
Land held for furniture- Factory Sale 3,500,000
Machinery leased out by Eragon 1,000,000
Php 11,000,000

6. The amount of the gain to be recognised in profit or loss in the year ended 31 December
2020 in respect of the investment property is
a. P400,000
b. P700,000
c. P800,000
d. P590,000

Solution:
Fair Value Php 8,000,000
Acquisition Cost (7,600,000)
Gain Php 400,000