Please provide solution to the problems: 1. Which of the following would not be reported as investment property? a. Property owned by the entity and leased out under one or more operating leases. b. Property held by the entity to be leased out under one or more operating leases c. Real estate held for an undetermined future use. d. Property owned by the entity and leased out to another entity under a finance lease. 2. A property is classified as investment property if a. it is leased out under a finance lease. b. the owner-occupied portion of the property is significant. c. the entity provides relatively insignificant ancillary services (e.g., security, janitorial services, and the like) to the occupants of the property. d. it is rented between a parent entity and a subsidiary and consolidated financial statements are prepared for the group. 3. All of the following do not qualify as investment property, except a. Machineries that are held for lease b. Hotels or motels c. Agricultural land purchased for appreciation purposes d. Equipment purchased for an indeterminate purpose 4. How does the fair value model differ from the revaluation model? a. Increases in carrying amount above a cost-based measure are recognized in equity b. Changes in fair value are recognized in profit or loss c. a and b d. neither a nor b 5. Select the correct statement. a. A leasing company should treat all its assets used in providing lease services as investment property. b. Investment properties that are to be disposed of without further development are treated as investment property until they are derecognized. c. All investment properties held for capital appreciation will be classified as held for sale in the long run. d. Investment properties being re-developed as investment properties on behalf of third parties are investment properties. 6. Which of the following generally provides the best evidence of fair value of an investment property? a. Discounted cash flow projections based on reliable estimates of future cash flows. b. Recent prices on less active markets with adjustments to reflect changes in economic conditions. c. Current prices for properties of a different nature or subject to different conditions. d. Current prices on an active market for similar property in the same location and condition.

7. MODULATE Co. has the following assets. Vacant building to be leased out under operating lease 4,000,000 Building being constructed for TO ADJUST, Inc. 800,000 Building under construction to be used as office 1,600,000 Building under construction to be rented out under operating lease 400,000 Building rented out to MODULATE's employees who pay rent at market rates 3,200,000 Office building awaiting disposal 200,000 How much is the total investment property? a. 4,200,000 b. 4,400,000 c. 4,600,000 d. 7,600,000 8. On January 1, 20x1, NURTURE REAR Co. acquired a building with an estimated useful life of 10 years and residual value of P400,000 for a total cost of P4,000,000. The fair value of the building on January 1, 20x1 is P4,800,000 while the fair value on December 31, 20x1 is P5,200,000. NURTURE estimates that if the building is sold currently on December 31, 20x1, costs to sell amount to P200,000. NURTURE uses the straight line method in depreciating its PPE. NURTURE uses the fair value model for its investment properties. The year-end adjusting entry will include a. 360,000 depreciation c. 200,000 unrealized gain b. 400,000 unrealized gain d. 1,200,000 unrealized gain 9. On December 31, 20x1, DECAPITATE BEHEAD Co. decided to lease out under operating lease one of its buildings that was previously used as office space. The building has an original cost of P12,000,000 and accumulated depreciation of P8,000,000 as of January 1, 20x1. Annual depreciation is P400,000. DECAPITATE Co. uses the fair value model for investment property. The fair value of the building on December 31, 20x1 is P6,000,000. The entry to record the transfer of the building to investment property includes a a. credit to gain on reclassification for P2,000,000. b. credit to revaluation surplus for P2,000,000. c. debit to building for P12,000,000. d. credit to revaluation surplus for P2,400,000. 10. PERIODIC REGULAR Co. acquired a building on January 1, 20x1 for a total cost of P24,000,000 and classified it as investment property. PERIODIC Co. uses the fair value model for its investment property. On January 1, 20x5, when the carrying amount of the building is P16,000,000, the elevator in the building was replaced for a total cost of P3,200,000. It is impracticable to determine the fair value of the replaced part. The fair value of the building on December 31, 20x5 is P17,200,000. How much is the loss recognized during the year? a. 3,200,000 b. 2,000,000 c. no loss d. indeterminable