Reference no: EM132934912

Questions -

Q1) Tabby Company and its subsidiaries own the following properties that are accounted for in accordance with PAS 40:

Land held for future factory site- P4,000,000

Machinery leased out by Illy to an unrelated party under an operating lease- P1,500,000

Land held by Illy for undetermined use- P5,000,000

A vacant building owned by Illy and to be leased out under an operating lease- P3,250,000

Land leased by Illy to a subsidiary under an operating lease- P2,000,000

Property held by a subsidiary of Illy, a real estate firm, in the ordinary course of business- P2,610,000

Property held by Illy for use in production- P3,950,000

Property under construction for use in an investment property- P5,550,000

What is the total investment property that should be reported in the consolidated statement of the financial position of the parent and its subsidiaries?

a. P15,550,000

b. P13,800,000

c. P17,170,000

d. P21,660,000

Q2) On January 1, 2021, KPMG Company classified noncurrent assets held for sale that had a carrying amount of P4,500,000. On this date, the assets are expected to be sold for P4,140,000 with a reasonable disposal cost of P180,000.

As of December 31, 2021, the asset had not been sold. After considering its options, management decided to put back the noncurrent asset for use in operations. On that date, KPMG's financial managers estimated the noncurrent asset to be sold at P3,240,000 with the disposal cost of P90,000, while depreciation for 2021 was computed at P900,000 if the noncurrent asset was not classified as held for sale.

At how much should the asset be recorded upon reclassification as "held for use" on December 31, 2021?

a. P3,960,000

b. P3,150,000

c. P3,600,000

d. P4,500,000