Read the following problems carefully and provide the solutions.

1) HIJ Co. acquired a building on January 1, 2021 for a total cost of 24,000,000 and classified it as investment property. HIJ Co. uses the fair value model for its investment property. On January 1, 2025, when the carrying amount of the building is 16,000,000, the elevator in the building was replaced for a total cost of 3,200,000. It is impracticable to determine the fair value of the replaced part. The fair value of the building on December 31, 2025 is 17,200,000. How much is the loss recognized during the year?

a. 3,200,000 b. 2,000,000 c. 0

d. not determinable from the given information. HIJ should resort to cost model.

2) 456 Co developed a trademark to distinguish its products from those of its competitors. The following were incurred in relation to the development:

Marketing research in determining consumer preferences 400,000

Registration fee with Intellectual Property Office 50,000

Design cost of trademark 1,500,000

Advertising for trademark recognition 200,000

Other legal fees for trademark registration 150,000

What amount should be capitalized as cost of intangible asset?

a. 1,700,000 b. 1,900,000 c. 2,100,000 d. 2,300,000

3) On January 1, 2021, 888 Company had capitalized cost of P10,000,000 for a new computer software product with an economic life of 4 years. Sales for 2021 for the software product amounted to P4,000,000. The total sales of the software over its economic life are expected to be P20,000,000. However, the pattern of the future sales from the computer software cannot be determined reliably.

Pila should record amortization of computer software in 2021 at:

a. 0 b. 2,000,000 c. 2,500,000 d. 5,000,000