life and residual value did not subsequently need revision. On 31 December 2018 the property was revalued downwards to GH¢35 million as a result of the recession (including GH¢14 on 1 January 2016 for GH¢40 December 2017 to GH¢43 million (including GH¢16.6 million in respect of the land). The NAC Ltd acquired a brand new property (land and buildings) buildings element was depreciated over a 50-year useful life to a zero residual value. The useful million (including GH¢15 million in respect of the land). The asset was revalued on 31 e years ended 31 December 2017 and 31 December 2018. Calculate the amounts recognised in profit or loss and other comprehensive income extract for million in respect of the land). Required: the

life and residual value did not subsequently need revision. On 31 December 2018 the property was revalued downwards to GH¢35 million as a result of the recession (including GH¢14 on 1 January 2016 for GH¢40 December 2017 to GH¢43 million (including GH¢16.6 million in respect of the land). The NAC Ltd acquired a brand new property (land and buildings) buildings element was depreciated over a 50-year useful life to a zero residual value. The useful million (including GH¢15 million in respect of the land). The asset was revalued on 31 e years ended 31 December 2017 and 31 December 2018. Calculate the amounts recognised in profit or loss and other comprehensive income extract for million in respect of the land). Required: the

Name: NAC Ltd acquired a brand new property (land and buildings)Calculate t
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Description: NAC Ltd acquired a brand new property (land and buildings)Calculate the amounts recognised in profit or loss and other comprehensive income extract formillion (including GH¢15 million in respect of the land). The asset was revalued on 31the years en

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 8P

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Surgimed Ghana Ltd. acquired a property for GH¢4 million with annual depreciation of GH¢300,000on the straight line basis. At the end of the previous financial year at 31st December, 2019, whenaccumulated depreciation was GH¢1 million, a further amount relating to an impairment loss of$350,000 was recognised, which resulted in the property being valued at its estimated value in use.On 1st May, 2020, as a consequence of a proposed move to new premises due to the COVID 19restrictions, the property was classified as held for sale. At the time of classification as held for sale,the fair value less costs to sell was GH¢2·4 million. On 1st July, 2020, the property market hadimproved and the fair value less costs to sell was reassessed at GH¢2·52 million and at the year-endon the 31st December, 2020, it had improved even further, so that the fair value less costs to sell wasGH¢2·95 million. The property was sold on 5th January, 2021for GH¢3 million.RequiredThe directors of Surgimed Ghana Ltd.…
Surgimed Ghana Ltd. acquired a property for GH¢4 million with annual depreciation of GH¢300,000 on the straight line basis. At the end of the previous financial year at 31st December, 2019, when accumulated depreciation was GH¢1 million, a further amount relating to an impairment loss of $350,000 was recognised, which resulted in the property being valued at its estimated value in use. On 1st May, 2020, as a consequence of a proposed move to new premises due to the COVID 19 restrictions, the property was classified as held for sale. At the time of classification as held for sale, the fair value less costs to sell was GH¢2·4 million. On 1st July, 2020, the property market had improved and the fair value less costs to sell was reassessed at GH¢2·52 million and at the year-end on the 31st December, 2020, it had improved even further, so that the fair value less costs to sell was GH¢2·95 million. The property was sold on 5th January, 2021 for GH¢3 million. Required The…
Surgimed Ghana Ltd. acquired a property for GH¢4 million with annual depreciation of GH¢300,000 on the straight line basis. At the end of the previous financial year at 31st December, 2019, when accumulated depreciation was GH¢1 million, a further amount relating to an impairment loss of $350,000 was recognised, which resulted in the property being valued at its estimated value in use. On 1st May, 2020, as a consequence of a proposed move to new premises due to the COVID 19 restrictions, the property was classified as held for sale. At the time of classification as held for sale, the fair value less costs to sell was GH¢2·4 million. On 1st July, 2020, the property market had improved and the fair value less costs to sell was reassessed at GH¢2·52 million and at the year-end on the 31st December, 2020, it had improved even further, so that the fair value less costs to sell was GH¢2·95 million. The property was sold on 5th January, 2020 for GH¢3 million.RequiredThe directors of Surgimed…
ABC Ltd acquired an item of machinery on 1 July 2021 for a cost of $120 000 When the asset was acquired it was considered that the asset would have a useful life to the entity of five years, after which time it would have no residual value It was considered that the pattern of economic benefits would best be reflected by applying the sum-of-digits method Contrary to expectations, on 1 July 2023 the asset was sold for $80 000 Required 1. What was the profit on disposal on 1 July 2023 and what are the journal entries to record the disposal? (Use sum of digit depreciation method) 2. Prepare Depreciation Schedule for the period.
A. MacPro Property Bhd acquired an investment property on 1 January 2015 and measured it using the cost model. On 1 January 2018, MacPro Property Bhd changed the accounting policy and used the fair value model to measure investment property. The acquisition cost of the property was RM70 million and the estimated useful life was 35 years. The fair values of the property were measured as below: Date RM (in million) 31/12/2015 72 31/12/2016 74 31/12/2017 78 31/12/2018 83 Profit after depreciation on investment property but before tax for 2017 and 2018 were RM80 million and RM95 million, respectively. Retained earnings brought forward on 1 January 2017 and 2018, were RM150 million and RM210 million, respectively. Assume that tax rate for 2017 and 2018 was 25%. REQUIRED: Discuss the accounting treatment of the above transaction in accordance to MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors. Prepare the comparative financial…
MacPro Property Bhd acquired an investment property on 1 January 2015 and measured it using the cost model. On 1 January 2018, MacPro Property Bhd changed the accounting policy and used the fair value model to measure investment property. The acquisition cost of the property was RM70 million and the estimated useful life was 35 years. The fair values of the property were measured as below: Date RM (in million) 31/12/2015 72 31/12/2016 74 31/12/2017 78 31/12/2018 83 Profit after depreciation on investment property but before tax for 2017 and 2018 were RM80 million and RM95 million, respectively. Retained earnings brought forward on 1 January 2017 and 2018, were RM150 million and RM210 million, respectively. Assume that tax rate for 2017 and 2018 was 25%. REQUIRED: Discuss the accounting treatment of the above transaction in accordance to MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors. Prepare the comparative…
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The original cost of the properties was P9,000,000 each when they were acquired on January 1, 2015. Both have an estimated useful life of 10 years The entity uses the fair value model to value all its investment properties. Required: Computed the followinga. Total amount recognized in the Dec. 31, 2017 statement of profit or loss b. Total amount recognized in the Dec. 31, 2017 Statement of financial position c. Provide adjusting enty on Dec. 31, 2017.
A freehold property with cost of RM3 million (land cost RM1.8 million)purchased on 1 January 2014 has been depreciated using straight line at 2% perannum assuming zero residual value for the building. It was revalued at RM5million on 1 January 2020 (land valued at RM3 million). No revision on theoriginal estimated useful economic life or residual value of the property isrequired. The company’s year-end is 31 December.Required:(i) Show the entries for revaluation on 1 January 2020. (ii) Calculate the depreciation of freehold property for year 2020. The depreciation method for a machine with cost of RM100,000 andaccumulated depreciation of RM40,000 at the beginning of the year 2020 to bechanged from reducing balance method to straight line method. Its remaininguseful life be revised to 5 years and with residual value of RM10,000.Required:(i) Calculate depreciation charge for the machine for year 2020.(ii) Determine the net book value of the machine at the end of year 2020.
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Qui Corporation takes a full year's depreciation expense in the year of an asset's acquisition, and no depreciation expense in the year of disposition. Data relating to one of Qui's depreciable assets at December 31, 2018 are as follows; Acquisition year- 2016; Estimated useful life- 5 years; Cost- P110,000; Residual value- P20,000; Accumulated depreciation - P72,000. Using the same depreciation method as used in 2016, 2017, and 2018, how much depreciation expense should Qui Corporation record in 2019 for this asset?
AICO Limited purchased a non-current asset (Motor Vehicle) at the beginning of year 2012 for N9,600,000 and applied a depreciation rate of 25% per annum using reducing balance method. The company sold the vehicle for N4,500,000 at the beginning of year 2016. You are required to prepare: i. Accumulated depreciation account and ii. Asset disposal account