On January 1, 2019, Amazon Inc bought a piece of land worth P2,600,000. The company business model is to buy and sell land. On February 28, 2022, the company decided to lease the land under an operating to another company.

The relevant estimated selling price and the cost to sell of the inventories are as follows:

                                   12/31/19                 12/31/20                 12/31/21                 12/31/22

Selling price              P2,650,000               P2,750,000               P2,800,000               2,880,000

Cost to sell                     150,000               120,000               100,000             130,000

 

1) What is the carrying amount of the inventory at December 31, 2021?

2) How much should be recorded as the initial cost of the investment property if it will be accounted using fair value model?

Answer rating: 100% (QA)

To determine the carrying amount of the inventory at December 31 2021 we need to calculate the accum... View the full answer