11-24. White Ski Resorts operates a series of ski resorts in northern Europe and reports under IFRS. On June 30, 20X0, White purchased land for €3,000,000. White reports land values on the balance sheet under Property, plant, and equipment. The appraisal value for the land (which you can assume is the same as the recoverable amount) was reported as: Appraisal Date Land Value 12/31/20X0 €3,150,000 12/31/20X1 €2,750,000 12/31/20X2 €2,850,000 Required: 1. Prepare the journal entries at the end of 20X0, 20X1, and 20X2 to record any changes in value to this land asset if White chooses the IFRS cost model to value this property. 2. Prepare the journal entries at the end of 20X0, 20X1, and 20X2 to record any changes in value to this land asset if White chooses the IFRS revaluation model to value this property.

11-24. White Ski Resorts operates a series of ski resorts in northern Europe and reports under IFRS. On June 30, 20X0, White purchased land for €3,000,000. White reports land values on the balance sheet under Property, plant, and equipment. The appraisal value for the land (which you can assume is the same as the recoverable amount) was reported as: Appraisal Date Land Value 12/31/20X0 €3,150,000 12/31/20X1 €2,750,000 12/31/20X2 €2,850,000 Required: 1. Prepare the journal entries at the end of 20X0, 20X1, and 20X2 to record any changes in value to this land asset if White chooses the IFRS cost model to value this property. 2. Prepare the journal entries at the end of 20X0, 20X1, and 20X2 to record any changes in value to this land asset if White chooses the IFRS revaluation model to value this property.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11EB: The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining...

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11-24. IceCap Hotels operates a series of northern European hotels and reports under IFRS. On June 30, 20X0, IceCap purchased a hotel for €2,100,000. IceCap reports hotel values on the balance sheet under Property, plant, and equipment. The estimated useful life of the hotel is 30 years from the date of purchase. The company uses straight-line depreciation for its hotels. The appraisal value for the hotel (which you can assume is the same as the recoverable amount) was reported as: Appraisal Date Hotel Value 12/31/20X0 €2,200,000 12/31/20X1 €1,400,000 2/31/20X2 €1,700,000 Required: Prepare the journal entries at the end of 20X0, 20X1, and 20X2 to record any changes in value to this hotel asset if IceCap chooses the IFRS cost model to value this property. Prepare the journal entries at the end of 20X0, 20X1, and 20X2 to record any changes in value to this hotel asset if IceCap chooses the IFRS revaluation model to value this property.
16. On April 27, 2021, BatoBatoPik purchased for P6,000,000 a warehouse building and the land on which it is located. The following data were available concerning the property: Current Appraised Value Original Cost Land P2,200,000 P1,800,000 Warehouse P3,300,000 P3,000,000 Total P5,500,000 P4,800,000 At what amount should the warehouse be recorded?
On Jan. 1, Town Company purchased for P5,400,000, including appraiser fee of P50,000, a warehouse building and the land on which it is located. The following data were available concerning the property: Seller’s original cost Land - P1,400,000 Warehouse building - P2,800,000 Current appraised value Land - P2,000,000 Warehouse building - P3,000,000 What is the initial measurement of the land? What is the initial measurement of the warehouse building?
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On 1 July 2022, Resonante Ltd acquired two assets within the same class of plant and equipment. Information on these assets is as follows. Cost Expected useful life Machine A $200 000 5 years Machine B 120 000 3 years The machines are expected to generate benefits evenly over their useful lives. The class of plant and equipment is measured using fair value. At 30 June 2023, information about the assets is as follows. Fair value Expected useful life Machine A $168 000 4 years Machine B 76 000 2 years On 1 January 2024, Machine B was sold for $58 000 cash. On the same day, Resonante Ltd acquired Machine C for $160 000 cash. Machine C has an expected useful life of 4 years. Resonante Ltd also made a bonus issue of 20 000 shares at $1 per share, using $16 000 from the general reserve and $4000 from the asset revaluation surplus created as a result of measuring Machine A at fair value. At 30 June 2024, information on the machines is as follows. Fair value Expected useful life Machine A $122…
Lenny Corporation purchased for P690,000 a tract of land on which a warehouse and office building were located. The following data were collected concerning the property: Current Assessed Vendor's Valuation Original Cost Land P280,000 P180,000 Warehouse 320,000 315,000 Office Building 200,000 129,000 P800,000 P624,000 Determine the appropriate amount that Lenny should charge to land. a. P280,000 b. P199,000 c. P241,500 d. P690,000
CPL a manufacturing company, purchases a property for $1M on January 20x1 for its investment potential. The land element of the cost is believed to be $ 400,000 and the building element is expected to have a useful life of 50 years. At December 31, 20x1, local property indices suggest that fair value of the property has risen to $ 1.1M. Required: Show how the property would be presented in the Financial Statements at December 31, 20x1 if CPL adopts: (a) the cost model (b) the fair value models
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TLM Technologies had these transactions related to intangible assets during the year. Jan. 2 Purchased a patent from Luna Industries for $200,000. The remaining legal life of the patent is 15 years, and TLM expects the patent to be useful for 8 years. Jan. 5 Paid legal fees in a successful legal defense of the patent of $80,000. June 29 Registered a trademark with the federal government. Registration costs were $11,800. TLM expects to use the trademark indefinitely. Sept. 2 Paid research and development costs of $500,000. Required: 1. Prepare the journal entries necessary to record the transactions. If no entry is required, select "No entry required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank. Jan. 2 fill in the blank 3a5c77f4ffe0ff9_2 fill in the blank 3a5c77f4ffe0ff9_3 fill in the blank 3a5c77f4ffe0ff9_5 fill in the blank 3a5c77f4ffe0ff9_6 Jan. 5 fill in the blank 3a5c77f4ffe0ff9_8 fill in the blank…
Garrett Corporation paid $300,000 to acquire land, buildings, and equipment. At the time of acquisition, Garrett paid $20,000 for an appraisal, which revealed the following values: land, $140,000; buildings, $175,000; and equipment, $35,000. Required: 1. What cost should the company assign to the land, buildings, and equipment, respectively? 2. Assume that Garrett uses IFRS and chooses to use the revaluation model to value its property, plant, and equipment. At the end of the year, the book value of the land, buildings, and equipment are $128,000, $155,000, and $28,000, respectively. The company determines that the fair value of the land, buildings, and equipment at the end of year is $153,000, $157,000, and $25,000, respectively. Prepare the journal entries that Garrett should make to value its property, plant, and equipment.
Tea Tree Bay Ltd acquires a Gizmo Machine from Jetsons Ltd for the following consideration:Cash $20,000Land In the books of Tea Tree Bay Ltd the land is recordedat its cost of $100,000. It has a fair value of $140,000.Equipment: In the books of Tea Tree Bay Ltd the equipment is recorded at a cost of$50,000. The equipment has an accumulated depreciation balance of $20,000.The fair value of the equipment is $23,000Assumptionof liabilityTea Tree Bay Ltd also agrees to assume the liability of Jetsons Ltd’s bank loanof $30,000 as part of the Gizmo Machine acquisition.OtherassociatedcostsTea Tree Bay Ltd also spend $5,000 as the installation cost. Testing cost was$2,500. Transportation cost for the machine was $700.During first year of operation, the company paid $650 as the maintenance costfor the machine.Required:a) Calculate the acquisition cost of the Gizmo Machine that will be used as the base for futuredepreciation charge. b) Provide the journal entries that would appear in Tea Tree…