On January 1, 20x1, Horror Co. acquired a building for P1,200,000. Professional fees for legal services...

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On January 1, 20x1, Horror Co. acquired a building for P1,200,000. Professional fees for legal services and property transfer taxes incurred on the acquisition amounted to P50,000. Start-up costs incurred amounted to P20,000. Operating losses incurred before the planned level of occupancy of the building is achieved amounted to P120,000. Materials, labor and overhead incurred for repairs and renovation of the property before it was put to leasable condition amounted to P200,000. Abnormal amounts of wasted material, labor and other resources incurred in developing the property amounted to P60,000. The renovation and repairs were completed on March 31, 20x1. The building has an estimated remaining useful life of 10 years with no residual value. Horror Co. uses the cost model and the straight-line method of depreciation for its investment property. The building has a fair value of P1,400,000 on December 31, 20x1. Requirement: How much is amount of investment property recognized on January 1, 20x1? On January 1, 20x1, Horror Co. acquired a building for P1,200,000. Professional fees for legal services and property transfer taxes incurred on the acquisition amounted to P50,000. Start-up costs incurred amounted to P20,000. Operating losses incurred before the planned level of occupancy of the building is achieved amounted to P120,000. Materials, labor and overhead incurred for repairs and renovation of the property before it was put to leasable condition amounted to P200,000. Abnormal amounts of wasted material, labor and other resources incurred in developing the property amounted to P60,000. The renovation and repairs were completed on March 31, 20x1. The building has an estimated remaining useful life of 10 years with no residual value. Horror Co. uses the cost model and the straight-line method of depreciation for its investment property. The building has a fair value of P1,400,000 on December 31, 20x1. Requirement: How much is amount of investment property recognized on January 1, 20x1?

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ANSWER I Step 1 i Investment property is the property which is held by the company to ea... View the full answer