CHAPTER 22: INVESTMENT PROPERTY

Paid insurance premium

Life insurance expense 30,000.00

Cash 30,000.00

On December 31, 2024 the Cash surrender value of the insurance is at Php 450,000

2021 12 833.33 per month

2022 12
2023 12
2024 0
36

Cash surrender value 30,000.00

Life insurance expense 10,000.00
Retained earnings 20,000.00

Cash surrender value 12,000.00

Life insurance expense 12,000.00

31-Dec-24 42,000.00
31-Dec-25 58,000.00
16,000.00 8,000.00

Cash surrender value 8,000.00

Life insurance expense 8,000.00

Cash 2,000,000.00
Cash surrender value 50,000.00
Life insurance expense 15,000.00
Gain on life insurance settlement 1,935,000.00
 Investment property
Land held by the parent for undetermined use 5,000,000.00
A vacant building owned by the parent to be leaseout under OL 3,000,000.00
Building owned by a subsidiary 1,500,000.00
Property under construction for use an investment property 6,000,000.00
15,500,000.00

Cost method

2021

Investment property 50,000,000.00

Cash 50,000,000.00

Depreciation Expense - Investment P 1,800,000.00

Accumulated Depreciation - IP 1,800,000.00

2022

Depreciation Expense - Investment P 1,800,000.00

Accumulated Depreciation - IP 1,800,000.00

2023

Depreciation Expense - Investment P 1,800,000.00

Accumulated Depreciation - IP 1,800,000.00

Fair value model

Investment property 50,000,000.00

Cash 50,000,000.00

Investment property 5,000,000.00

Gain on change in FV 5,000,000.00

Loss on change in FV 2,000,000.00

Investment property 2,000,000.00

Investment property 7,000,000.00

Gain on change in FV 7,000,000.00
 Cost 2,200,000.00
UL 40.00
Depreciation 55,000.00

Accumulated Dep 165,000.00

Cost 2,200,000.00
Book Value 2,035,000.00
Proceeds 2,900,000.00
Gain 865,000.00

Fair value, 2022 9,700,000.00

Fair value, 2021 10,100,000.00
Loss on change in FV (400,000.00)

Cost 9,000,000.00
UL 30.00
Depreciation 300,000.00

Accumulated Dep 300,000.00

Additional Dep 300,000.00 --> EXPENSE
Ending ACCUM DEP 600,000.00
Cost 9,000,000.00
Book Value/CA 8,400,000.00
 Fair Value Cost

31-Dec-22 5,900,000.00
31-Dec-21 6,000,000.00
Loss on change in FV (100,000.00)

Cost 5,800,000.00
Useful life 40.00
Depreciation expense 145,000.00

Fair value, 2021 8,000,000.00

Cost 7,600,000.00
Gain 400,000.00

Cost 5,000,000.00
UL 20.00
Depreciation/AD 250,000.00

Carrying amount 4,750,000.00

 1 3
Acquisition cost 200,000,000.00 Building, PPE 17,680,000.00
Transfer taxes 20,000,000.00
Legal cost 1,000,000.00 4
Total cost 221,000,000.00 Fair value, each unit 25,000,000.00
Portion of investment property 0.90 # of units 9.00
Investment property 198,900,000.00 Total fair value 225,000,000.00
Initial cost of IP 198,900,000.00
2 Gain on change in FV 26,100,000.00
Total Cost 221,000,000.00
Portion used as PPE 0.10 5
PPE 22,100,000.00 Building, PPE 17,680,000.00
Portion of Land 0.20 Useful Life 50.00
Land, PPE 4,420,000.00
Depreciation 353,600.00
 2021
Life insurance expense 60,000.00
Cash 60,000.00

2022
Life insurance expense 60,000.00
Cash 600,000.00

2023
Life insurance expense 60,000.00
Cash 600,000.00

Cash surrender value 60,000.00

Retained Earnings 40,000.00
Life insurance expense 20,000.00

2024
Life insurance expense 60,000.00
Cash 60,000.00

Cash surrender value 24,000.00

Life insurance expense 24,000.00

2025
Life insurance expense 60,000.00
Cash 60,000.00

Cash surrender value 16,000.00

Life insurance expense 16,000.00

2021 Cash 2,000,000.00

Life insurance expense 80,000.00 Cash surrender value 100,000.00
Cash 80,000.00 Life insurance expense 30,000.00
Gain on life insurance settlement 1,870,000.00
2022
Life insurance expense 80,000.00
Cash 80,000.00

2023
Life insurance expense 80,000.00
Cash 80,000.00

Cash 5,000.00
Life insurance expense 5,000.00

Cash surrender value 42,000.00

Retained Earnings 28,000.00
Life insurance expense 14,000.00

2024
Life insurance expense 80,000.00
Cash 80,000.00

Cash 6,000.00
Life insurance expense 6,000.00

Cash surrender value 5,000.00

Life insurance expense 5,000.00
 Life insurance premium 20,000.00
Increase in cash surrender value 10,500.00
Dividends received 3,000.00
Life insurance expense 6,500.00

Life insurance premium 40,000.00

Increase in cash surrender value 21,000.00
Life insurance expense 19,000.00
Proceeds 2,000,000.00 CSV, 2021 19,000.00
Cash surrender value 18,000.00 CSV, 2020 15,000.00
Unused premium 20,000.00 4,000.00
Gain on settlement 1,962,000.00 Teresa Pro-rate 0.75
Increase 3,000.00

Premiums paid 80,000.00 CSV, 2020 15,000.00

Unused portion 20,000.00 Increase 3,000.00
Increase in CSV 3,000.00 CSV, 10/01/2021 18,000.00
Expense 57,000.00 Heiven