On October 1, 2021, FGH Corporation purchases an industrial building by an issue of P5,000,000 ordinary...

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On October 1, 2021, FGH Corporation purchases an industrial building by an issue of P5,000,000 ordinary shares of P1 par each to the vendor. FGH Corporation's shares have been actively traded on the stock exchange but its quoted price has been erratic ranging from a low of P3.50 to a high of P13.50 for the year. On the date of purchase of the building, FGH Corporation's shares are quoted at P8.80. the company paid P220,000 transfer and legal cost in relation to the building. At the time of acquisition, the industrial building has a fair value of P35,000,000, on the existing use basis. At what amount should the building be initially recorded? On October 1, 2021, FGH Corporation purchases an industrial building by an issue of P5,000,000 ordinary shares of P1 par each to the vendor. FGH Corporation's shares have been actively traded on the stock exchange but its quoted price has been erratic ranging from a low of P3.50 to a high of P13.50 for the year. On the date of purchase of the building, FGH Corporation's shares are quoted at P8.80. the company paid P220,000 transfer and legal cost in relation to the building. At the time of acquisition, the industrial building has a fair value of P35,000,000, on the existing use basis. At what amount should the building be initially recorded?

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The industrial building should be initially recorded at its fair value of P35000000 When a company a... View the full answer