You manage a real estate investment company. One year ago, the company purchased 10 parcels of...
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You manage a real estate investment company. One year ago, the company purchased 10 parcels of land distributed throughout the community for $12.6 million each. A recent appraisal of the properties indicates that five of the parcels are now worth $10.0 million each, while the other five are worth $18.0 million each. Ignoring any income received from the properties and any taxes paid over the year, calculate the investment company's accounting earnings and its economic earnings in each of the following cases: a. The company sells all of the properties at their appraised values today. b. The company sells none of the properties. c. The company sells the properties that have fallen in value and keeps the others. d. The company sells the properties that have risen in value and keeps the others. Note: Negative amounts should be indicated by parentheses. Enter your answers in millions. a b C d Accounting Economic Income (million) Income (million) You manage a real estate investment company. One year ago, the company purchased 10 parcels of land distributed throughout the community for $12.6 million each. A recent appraisal of the properties indicates that five of the parcels are now worth $10.0 million each, while the other five are worth $18.0 million each. Ignoring any income received from the properties and any taxes paid over the year, calculate the investment company's accounting earnings and its economic earnings in each of the following cases: a. The company sells all of the properties at their appraised values today. b. The company sells none of the properties. c. The company sells the properties that have fallen in value and keeps the others. d. The company sells the properties that have risen in value and keeps the others. Note: Negative amounts should be indicated by parentheses. Enter your answers in millions. a b C d Accounting Economic Income (million) Income (million)
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Answer rating: 100% (QA)
The initial total cost of all properties is 126 million 10 126 million The current total appraised value is 10 million 5 18 million 5 140 million Case ... View the full answer
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
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