Question: Ma Ltd is a GST registered company with an annual accounting period ending on 30 June 2018. It measures its in...
Question:
Ma Ltd is a GST registered company with an annual accounting period ending on 30 June 2018. It measures its investment property and all PP & E except equipment at fair value.
On 1 July 2017, the general ledger balance for Building, classified as PP & E, was $2,100,000, for Accumulated Depreciation, Building was $0, and for Revaluation Reserve, Building was $230,000. The building will be depreciated under the straight-line method for another 40 years, assuming no residual value, and counting forward from 1 July 2017. On 30 June 2018, after annual depreciation had been recorded and posted, an appraisal produced a fair value estimate for the building of $2,000,000. Ma Ltd’s general ledger also includes the following accounts: Gain/Loss Revaluation, Building and OCI Gain/Loss, Revaluation Building.
Required: Prepare the journal entry to revalue the building on 30 June 2018.
Homework Answers
Journal Entry on June 30th, 2018:
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Question: Ma Ltd is a GST registered company with an annual accounting period ending on 30 June 2018. It measures its in...
July 1st2018, the GL (i.e. general ledger) balance for Building which was classified as Property, Plant and Equipment wa...
July 1st2018, the GL (i.e. general ledger) balance for Building which was classified as Property, Plant and Equipment was valued at $2,100,000. In addition, Accumulated Depreciation of the Building was $0, and also there was a Revaluation Reserve for Buildings which was $230,000. The building will depreciate using the straight-line depreciation method for 40 years and assuming that there is no residual value, and it is counting forward from July 1st2018. June 30th 2019, after annual depreciation, had been posted...
On 30 June 2019, Grove Ltd adopted the revaluation model to measure equipment. Due to the...
On 30 June 2019, Grove Ltd adopted the revaluation model to measure equipment. Due to the revaluation carried out on 30 June 2019, Grove Ltd recognised a gain on revaluation of $30,000 for the one item of equipment listed in this class. After recording depreciation expense on equipment for the year ended 30 June 2020, and writing the equipment down to its carrying amount of $325,000, Grove Ltd obtained the fair value of $285,000 as at 30 June 2020 for...
QUESTION 9 Milli Ltd decided to adopt the revaluation method on 30 June 2019. On this...
QUESTION 9 Milli Ltd decided to adopt the revaluation method on 30 June 2019. On this date the general ledger included a single item of machinery which was purchased by the company in a previous financial year: $ Machinery at Cost 270,000 Less Accumulated Depreciation (70,000) On 30 June 2019 the machinery had a fair value of $150,000, an expected residual value of $50,000 and remaining useful life of 10 years. Required: Calculate any revaluation increment or decrement for the...
A partial statement of financial position of Wildhorse Ltd. on December 31, 2019, showed the following...
A partial statement of financial position of Wildhorse Ltd. on December 31, 2019, showed the following property, plant, and equipment assets accounted for under the cost model (accumulated depreciation includes depreciation for 2019): Buildings Less: accumulated depreciation Equipment Less: accumulated depreciation $326,000 126,000 $200,000 $125,000 45,000 80,000 Wildhorse uses straight-line depreciation for its building (remaining useful life of 20 years, no residual value) and for its equipment (remaining useful life of 8 years, no residual value). Wildhorse applies IFRS and...
Here are the accounts available: Accounts Payable Accounts Receivable Accumulated Depreciation - Buildings Accumulated Depreciation -...
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...
Oriole Ltd. purchased an electric wax melter on April 30, 2020, by trading in its old...
Oriole Ltd. purchased an electric wax melter on April 30, 2020, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase: List price of new melter Cash paid Cost of old melter (5-year life, $620 residual value) Accumulated depreciation on old melter (straight-line) Market value of old melter in active secondary market $15,600 10,600 12,620 7,200 5,900 Assuming that Oriole's fiscal year ends on December 31 and depreciation has been...
The following data are taken from the trial balance of Bula Island Limited on 30 June...
The following data are taken from the trial balance of Bula Island Limited on 30 June 2018 with selected comparative information provided for 30 June 2017. 2018 2017 Sales revenue 9,245,000 Interest revenue 850,000 Royalties revenue 1,450,000 Dividend revenue 150,000 Depreciation-building 147,500 Depreciation-plant 262,500 Depreciation-equipment 75,000 Research and development expenditure 1,650,000 Cost of goods sold 4,005,000 Warranty expense 195,000 Wages and salaries expense 3,475,000 Long service leave expense 235,000 Interest expense 305,000 Rates and taxes on property 145,500 Doubtful debts...
Ethan Ltd acquired all the issued shares ( div.) of Darren Ltd on 1 July 2018 for $110 000. At this date Darren Ltd reco...
Ethan Ltd acquired all the issued shares ( div.) of Darren Ltd on 1 July 2018 for $110 000. At this date Darren Ltd recorded a dividend payable of $10 000 and equity of: Share capital $54 000 Retained earnings 36 000 Asset revaluation surplus 18 000 All the identifiable assets and liabilities of Darren Ltd were recorded at amounts equal to their fair values at acquisition date except for: Carrying amount Fair value Inventories 14 000 16 000 Machinery...
Extracts from the statements of financial position of Wild Boar Ltd as at 30 June 2017...
Extracts from the statements of financial position of Wild Boar Ltd as at 30 June 2017 and 30 June 2016 are as follows: 2017 30 June 2016 30 June Assets Cash 150,000 180,000 Account receivables 96,000 85,000 Allowance for bad debts (7,000) (5,200) Prepaid rent 50,000 56,000 Equipment 80,000 80,000 Accum. dep – equipment (32,000) (28,000) Land 200,000 100,000 Machine 800 0 Accum. dep – Machine 50 0 Deferred tax asset ? 19,470 Liabilities Trade payables 68,000 76,000 Unearned service...
Extracts from the statements of financial position of Wild Boar Ltd as at 30 June 2017...
Extracts from the statements of financial position of Wild Boar Ltd as at 30 June 2017 and 30 June 2016 are as follows: 2017 2016 30 June 30 June Assets Cash 150,000 180,000 Account receivables 96,000 85,000 Allowance for bad debts (7,000) (5,200) Prepaid rent 50,000 56,000 Equipment 80,000 80,000 Accum. dep-equipment (32,000) (28,000) Land 200,000 100,000 Machine 800 0 Accum. dep - Machine 50 0 Deferred tax asset 19,470 Liabilities Trade payables 68,000 76,000 Unearned service revenue 60,000 50,000...
On 30 June 2019, Grove Ltd adopted the revaluation model to measure equipment. Due to the revaluation carried out on 30 June 2019, Grove Ltd recognised a gain on revaluation of $30,000 for the one item of equipment listed in this class. After recording depreciation expense on equipment for the year ended 30 June 2020, and writing the equipment down to its carrying amount of $325,000, Grove Ltd obtained the fair value of $285,000 as at 30 June 2020 for...
QUESTION 9 Milli Ltd decided to adopt the revaluation method on 30 June 2019. On this date the general ledger included a single item of machinery which was purchased by the company in a previous financial year: $ Machinery at Cost 270,000 Less Accumulated Depreciation (70,000) On 30 June 2019 the machinery had a fair value of $150,000, an expected residual value of $50,000 and remaining useful life of 10 years. Required: Calculate any revaluation increment or decrement for the...
A partial statement of financial position of Wildhorse Ltd. on December 31, 2019, showed the following property, plant, and equipment assets accounted for under the cost model (accumulated depreciation includes depreciation for 2019): Buildings Less: accumulated depreciation Equipment Less: accumulated depreciation $326,000 126,000 $200,000 $125,000 45,000 80,000 Wildhorse uses straight-line depreciation for its building (remaining useful life of 20 years, no residual value) and for its equipment (remaining useful life of 8 years, no residual value). Wildhorse applies IFRS and...
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...
Oriole Ltd. purchased an electric wax melter on April 30, 2020, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase: List price of new melter Cash paid Cost of old melter (5-year life, $620 residual value) Accumulated depreciation on old melter (straight-line) Market value of old melter in active secondary market $15,600 10,600 12,620 7,200 5,900 Assuming that Oriole's fiscal year ends on December 31 and depreciation has been...
Extracts from the statements of financial position of Wild Boar Ltd as at 30 June 2017 and 30 June 2016 are as follows: 2017 2016 30 June 30 June Assets Cash 150,000 180,000 Account receivables 96,000 85,000 Allowance for bad debts (7,000) (5,200) Prepaid rent 50,000 56,000 Equipment 80,000 80,000 Accum. dep-equipment (32,000) (28,000) Land 200,000 100,000 Machine 800 0 Accum. dep - Machine 50 0 Deferred tax asset 19,470 Liabilities Trade payables 68,000 76,000 Unearned service revenue 60,000 50,000...
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