Company A owns a plantation forest. As at the end of the reporting period the fair value of the plantation forest, including the land, was $2.5 million. Company A needs to determine the fair value of the trees excluding the land to comply with AASB 141 at its reporting period. How does company A determine the fair value of the trees?

Company A owns a plantation forest. As at the end of the reporting period the fair value of the plantation forest, including the land, was $2.5 million. Company A needs to determine the fair value of the trees excluding the land to comply with AASB 141 at its reporting period. How does company A determine the fair value of the trees?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Denger

A: The objective of the question is to determine the journal entry required to record the increase in…

Q: Spectrum Ltd owns the following properties at 1 April 2012: Property A: An office building used by…

A: The objective of the question is to prepare extracts from Spectrum Ltd.’s entity statement of profit…

Q: am. 118.

A: For accounting purposes, the equipment is depreciated over six years using the straight-line method.…

Q: Michelin Star Co. decided to lease its Building to Hawker Inc. Which of the following situation is…

A: The correct answer for the above mentioned question is given in the following steps for your…

Q: In 2022, Firm L purchased machinery costing $21,300 and elected to expense the entire cost under…

A: Section 179 allows business's to deduct the expense of qualified asset in the first year of use for…

Q: On May 15, 2020, Aldean Company, a calendar year taxpayer, purchased and placed into service a…

A: As per USA Income Tax Act i.e rules of depreciation by IRS , a…

Q: a. Compute the amount of Aqua's recognized gain on the sale of the realty.

A: Capital gain refers to the profit that is earned when an asset, such as a stock, bond, real estate,…

Q: On July 1, 2020, Martinez Ltd., a publicly listed company, acquired assets from Marigold Ltd. On the…

A: A reduction in the value of assets due to usage, obsolescence, or passage of time is known as…

Q: In 2022, Mao Li Corporation determined that a production machine used in its operations was impaired…

A: Under IFRS, the gain due to the increase in fair value of the production machine in 2023 would be…

Q: Industrial Metals purchases land, building, and equipment together for $1.2 million. The estimated…

A: Land, building and equipment are fixed assets of a business. These assets are recorded under…

Q: Ayayai Automotive is looking to expand its operations and has approached Dynatech Garage to acquire…

A: The objective of this question is to record the journal entry for the purchase of Dynatech Garage by…

Q: PT Adista owns land that was purchased in cash on January 2, 2018 at a cost of IDR 1,000,000,000.…

A: There are two methods for subsequent accounting of the fixed assets; which are, Cost model and the…

Q: 01. Martin owns land that is classified as PPE. The land has previously been valued at cost. The…

A: “Since you have posted multiple questions, we will provide the solution only to the first question…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Property, Plant and Equipment

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Red River Bakery purchases land, building, and equipment for a single purchase price of $260,000. However, the estimated fair values of the land, building, and equipment are $126,000, $198,000, and $36,000, respectively, for a total estimated fair value of $360,000. Required: Determine the amounts Red River should record in the separate accounts for the land, the building, and the equipment.
Barbosa Ltd purchased an item of plant for GHS 300,000 which was to be depreciated over its useful life of 10 years. On 1 January 20X5, the plant was revalued to its fair value of GHS 600,000, with no revision to its remaining useful life. On 1 January 20X6, the plant was sold for GHS 700,000. In accordance with IAS 16 Property, Plant and Equipment, what was the profit on disposal to be included in Barbosa Ltd's income statement for the year ended 31 December 20X6?
On July 1, 2020, Sheffield Ltd., a publicly listed company, acquired assets from Bramble Ltd. On the transaction date, a reliable, independent valuator assessed the fair values of these assets as follows: Manufacturing plant (building #1) $399,580 Storage warehouse (building #2) 209,940 Machinery (in building #1) 74,700 Machinery (in building #2) 45,000 The buildings are owned by the company, and the land that the buildings are situated on is owned by the local municipality and is provided free of charge to the owner of the buildings to encourage local employment.In exchange for the acquisition of these assets, Sheffield issued 145,750 common shares. Sheffield’s shares are thinly traded (that is, traded in relatively low volume leading to more volatile price changes than most public companies). In the most recent sale of Sheffield’s shares on the Toronto Stock Exchange, 510 shares were sold for $5 per share. At the time of acquisition, both buildings were…
On July 1, 2020, Sheffield Ltd., a publicly listed company, acquired assets from Bramble Ltd. On the transaction date, a reliable, independent valuator assessed the fair values of these assets as follows: Manufacturing plant (building #1) $399,580 Storage warehouse (building #2) 209,940 Machinery (in building #1) 74,700 Machinery (in building #2) 45,000 The buildings are owned by the company, and the land that the buildings are situated on is owned by the local municipality and is provided free of charge to the owner of the buildings to encourage local employment.In exchange for the acquisition of these assets, Sheffield issued 145,750 common shares. Sheffield’s shares are thinly traded (that is, traded in relatively low volume leading to more volatile price changes than most public companies). In the most recent sale of Sheffield’s shares on the Toronto Stock Exchange, 510 shares were sold for $5 per share. At the time of acquisition, both buildings…
Prater Incorporated enters into an exchange in which it gives up its warehouse on 10 acres of land and receives a tract of land. A summary of the exchange is as follows: What are Prater's realized and recognized gain on the exchange and its basis in the assets it received in the exchange? Answer is complete but not entirely correct. Prater Incorporated enters into an exchange in which it gives up its warehouse on 10 acres of land and receives a tract of land. A summary of the exchange is as follows: Transferred Warehouse Land Mortgage on warehouse Cash Assets Received Land FMV $ 432,500 Original Basis Accumulated Depreciation $ 278,000 $ 55,500 55,000 55,000 63,750 21,000 21,000 FMV $ 444,750 What are Prater's realized and recognized gain on the exchange and its basis in the assets it received in the exchange? Answer is complete but not entirely correct. Description Realized gain Amount $ 167,250 Recognized gain $ 84,750 x Adjusted basis in new property $ 278,000