San Jose Realty Corporation acquired a tract of land onJanuary 1, 2020 for P20 million. Transaction costs paidSan Jose relating to its acquisition amounted to P800.000The tract of land was subdivided into 400 residential lotshaving an area of 200 square meters each, after makingprovision for public and common roads, incurring additionalcost of P6,200,000. At December 31, 2021, the market valueper lot was P250,000. As of December 31, 2022, 380 lots were sold and the marketvalue of each lot had increased to P270,000. On this date, thecompany decided to transfer the remaining unsold lots intoinvestment property that is to be carried under the fair valuemodel.What amount of gain should San Jose Realty recognize as aresult of the transfer from inventory to investment property?P5,400,000P4,500,000P4,050,000P1,350,000a.b.с.d.

When there is a transfer of inventories to investment property at fair value then the difference…

As of December 31, 2022, 380 lots were sold and the market value of each lot had increased to P270,000. On this date, the company decided to transfer the remaining unsold lots into investment property that is to be carried under the fair value model. What amount of gain should San Jose Realty recognize as a result of the transfer from inventory to investment property? P5,400,000 P4,500,000 P4,050,000 P1,350,000 a. b. C. d.

As of December 31, 2022, 380 lots were sold and the market value of each lot had increased to P270,000. On this date, the company decided to transfer the remaining unsold lots into investment property that is to be carried under the fair value model. What amount of gain should San Jose Realty recognize as a result of the transfer from inventory to investment property? P5,400,000 P4,500,000 P4,050,000 P1,350,000 a. b. C. d.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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San Jose Realty Corporation acquired a tract of land on January 1, 2020 for P20 million. Transaction costs paid by San Jose relating to its acquisition amounted to P800,000. The tract of land was subdivided into 400 residential lots, having an area of 200 square meters each, after making provision for public and common roads, incurring additional cost of P6,200,000. At December 31, 2021, the market value per lot was P250,000. As of December 31, 2022, 380 lots were sold and the market value of each lot had increased to P270,000. On this date, the company decided to transfer the remaining unsold lots into investment property that is to be carried under the fair value model. What amount of gain should San Jose Realty recognize as a result of the transfer from inventory to investment property? a. 5,400,000 b. 4,500,000 c. 4,050,000 d. 1,350,000
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