Bullwinkle Co. acquired an adjacent vacant lot with the hope of selling it in the future at a gain. The lot is not intended to be used in Bullwinkle businessoperations. Where should such real estate be listed on the balance sheet?
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Bullwinkle Co. acquired an adjacent vacant lot with the hope of selling it in the future at a gain. The lot is not intended to be used in Bullwinkle business
operations. Where should such real estate be listed on the
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- A. blue ocean associate is looking to generate income from extra cash. The company purchased an old building, will be restored and sold at a profit. how should blue ocean classify the building on its book? B. And if blue ocean had bought a lanf for the site of a new office, what depreciation method would you, as its newly hired accountant, suggest it uses for the land?Ahmed Company bought piece of land and decided to sell it in the future at a profit as the value of the land will increase. In which financial statement this land should be reported and which part specifically? Do we need to record depreciation on land1. Bullwinkle Co. acquired an adjacent vacant lot with the hope of selling it in the future at a gain. The lot is not intended to be used in Bullwinkle's business operations. Where should such real estate be listed on the balance sheet? 2. Distinguish between the accounting for capital expenditures and revenue expenditures. 3. Immediately after a used truck is acquired, a new motor is installed at a total cost of $3,850. Is this a capital expenditure or a revenue expenditure? 4. Keyser Company purchased a machine that has a manufacturer's suggested life of 20 years. The company plans to use the machine on a special project that will last 12 years. At the completion of the project, the machine will be sold. Over how many years should the machine be depreciated? 5. Is it necessary for a business to use the same method of computing depreciation for all classes of its depreciable assets and for financial statement purposes and in determining income taxes?
- Smatter Corporation purchased land for a new building. Which of the following costswould not be included in the cost of the land?a. Purchase price of the landb. Cost of demolishing an old garage located on the landc. Cost of a new parking lot constructed on the landd. Brokerage commission paid to the real estate agent who handled the land transactionBellow are elements in the financial statements on which the director of ABC Building Limited require advice: • In 2016, ABC Building Limited acquired several properties as investment properties. Since ABC has not adopted accounting policy in accounting for property as investment properties before, the financial director considered such adoption is change in accounting policy. ABC Building Limited has no investment property before 2016. • In 2018, ABC Building Limited proposed to change to the cost model instead of fair value model in accounting for its investment property in accordance with PSAK 13. Its financial director considered whether ABC could make such changes and, if change could be made, how ABC should account for the changes • In 2020, ABC Building limited decided to make a change in estimate as to the duration of depreciation of its building, increasing it from 20 to 30 years. Please Discuss how the above items should be dealt with in the financial statements of ABC…During the current year, Alanna Co. had the following transactions pertaining to its new office building. A. What should Alanna Co. record on its books for the land? The total cost of land includes all costs of preparing the land for use. The demolition cost of the old building is added to the land costs, and the sale of the old building scrap is subtracted from the land cost. B. What should Alanna Co. record on its books for the building?
- If land is recorded at its net realizable value, this would be a sign that the company O has made an error in recording its property. O wants to determine net worth. O is not a going concern. O is changing its accounting for assets.Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported the market value of the land to be $221,567. Focus Company initially offered to buy the land for $181,076. The companies settled on a purchase price of $209,946. On the same day, another piece of land on the same block sold for $231,997. Under the cost concept, at what amount should the land be recorded in the accounting records of Focus Company? Oa. $221,567 Ob. $231,997 Oc. $209,946 Od. $181,076On December 31, 20x1, ABC Co. has no intention of selling a land classified as investment property measured at cost. However, on Jan. 2, 20x2, because of an unanticipated opportunity, ABC Co. sold the b ' at a very high profit. How should ABC Co. classify the land in its December 31, 20x1 statement of financial position? A. As held for sale asset measured at the sale price on January 2,20x; B. The land shall not be included in the December 31, 20x1 statement of financial position because it is already considered sold. C. As investment property measured at cost. D. As investment property measured at the sale price on January 20x2.
- Below are elements in the financial statements on which the director of ABC Building Limited require advice: • In 2016, ABC Building Limited acquired several properties as investment properties. Since ABC has not adopted accounting policy in accounting for property as investment properties before, the financial director considered such adoption is change in accounting policy. ABC Building Limited has no investment property before 2016. • In 2018, ABC Building Limited proposed to change to the cost model instead of fair value model in accounting for its investment property in accordance with PSAK 13. Its financial director considered whether ABC could make such changes and, if change could be made, how ABC should account for the changes • In 2020, ABC Building limited decided to make a change in estimate as to the duration of depreciation of its building, increasing it from 20 to 30 years. Please discuss how the above items should be dealt with in the financial statements of ABC…For some of the fixed assets of a business, the balance in Accumulated Depreciation is equal to the cost of the asset. (a) Is it permissible torecord additional depreciation on the assets if they are still useful to the business? Explain. (b) When should an entry be made to remove thecost and the accumulated depreciation from the accounts?Carver Inc. purchased a building and the land on which the building is situated for a total cost of $922,800 cash. The land was appraised at $244,081 and the building at $817,139. What is the accounting term for this type of acquisition? Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building. Would the company recognize a gain on the purchase? Record the purchase in a horizontal statements model.