Here are the accounts available: Accounts Payable Accounts Receivable Accumulated Depreciation - Buildings Accumulated Depreciation -...

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Larkspur Ltd. purchased a building on January 1, 2018 for $15,360,000. Larkspur accounted for this asset using the revaluatio Here are the accounts available:

Accounts Payable
Accounts Receivable
Accumulated Depreciation - Buildings
Accumulated Depreciation - Equipment
Accumulated Depreciation - Leasehold Improvements
Accumulated Depreciation - Machinery
Accumulated Depreciation - Vehicles
Advertising Expense
Asset Retirement Obligation
Buildings
Cash
Common Shares
Contributed Surplus
Contributed Surplus - Donated Capital
Cost of Goods Sold
Deferred Revenue - Government Grants
Depreciation Expense
Donation Revenue
Equipment
Finance Expense
Finance Revenue
Gain on Disposal of Building
Gain on Disposal of Equipment
Gain on Disposal of Machinery
Gain on Disposal of Truck
Gain or Loss in Value of Investment Property
GST Payable
GST Receivable
Interest Expense
Interest Income
Interest Payable
Interest Receivable
Inventory
Investment Property
Land
Land Improvements
Legal Expense
Loss on Disposal of Building
Loss on Disposal of Equipment
Loss on Disposal of Land
Loss on Disposal of Machinery
Loss on Disposal of Truck
Machinery
Mineral Resources
Mortgage Payable
No Entry
Notes Payable
Notes Receivable
Office Expense
Owner's Drawings
Prepaid Expenses
Prepaid Insurance
Profit on Construction
Purchase Discounts
Purchase Returns and Allowances
Rent Expense
Repairs and Maintenance Expense
Revaluation Gain or Loss
Revaluation Surplus (OCI)
Revenue - Government Grants
Salaries and Wages Expense
Salaries and Wages Payable
Sales Revenue
Service Revenue
Supplies
Supplies Expense
Tenant Deposits Liability
Vehicles

business accounting

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Answer 1

Answer #1

Date	Account	Debit	Credit
Dec 31st 2019	Buildings (Note 2)	$196,000
	Revaluation surplus		$196,000
	(being upward revaluation of building account was adjusted in the books)
Dec 31st 2019	Depreciation expense (Note 3)	$519,000
	Buildings		$519,000
	(being depreciation for the year on revalued building adjusted)
Dec 31st 2021	Revaluation surplus (Note 5)	$196,000
	Impairment loss	$88,400
	Buildings		$284,400
	(being impairment loss on building writtenoff to extent revaluation surplus available and balance to impairment loss account)
Dec 31st 2021	Depreciation expense (Note6)	$508,061
	Building		$508,061
	(being depreciation for the year on adjusted buildings amount)

Notes:

1. Buildings was initially recognised at $15,360,000 and life is 30 years so depreciation per year is = 15360000/30 = $1024000 per year

2.Written down value of buildings on 31st december 2019 is 14,336,000 (15360000- 2*1024000)

Revaluation surplus is 14532000-14336000 = 196000

3.Depreciation from year 3 = 14532000/ 28 (balance life) = 1038000

4.Written down value of buildings on 31st december 2021 is 13,494,000 (14532000- 2*1038000)

5.New revalued figure is 13209600 therefore impairment loss = 13494000-13209600 = 284400

this loss should be first adjusted to revaluation reserve available and balance to be charged to impairment loss

6. depreciation from year 5 = 13209600/26 = 508061

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Answer 2

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