Current Attempt in Progress A partial statement of financial position of Cullumber Ltd. on December 31, 2022, showed the following property, plant, and equipment assets accounted for under the cost model (accumulated depreciation includes depreciation for 2022): Buildings Less: Accumulated depreciation Equipment Less: Accumulated depreciation (a) $298,000 98,000 $134.000 Cullumber 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). Cullumber applies IFRS and has decided to adopt the revaluation model for its building and equipment, effective December 31, 2022. On this date, an independent appraiser assessed the fair value of the building to be $140,000 and that of the equipment to be $103,000. Account Titles and Explanation (To adjust the Buildings account to fair value) (To eliminate the accumulated depreciation) 54,000 Prepare the necessary general journal entries, if any, to revalue the building and the equipment as at December 31, 2022, using the asset adjustment method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) (To eliminate the accumulated depreciation) (To adjust the Equipment account to fair value) $200,000 80,000 Debit Credit
Current Attempt in Progress A partial statement of financial position of Cullumber Ltd. on December 31, 2022, showed the following property, plant, and equipment assets accounted for under the cost model (accumulated depreciation includes depreciation for 2022): Buildings Less: Accumulated depreciation Equipment Less: Accumulated depreciation (a) $298,000 98,000 $134.000 Cullumber 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). Cullumber applies IFRS and has decided to adopt the revaluation model for its building and equipment, effective December 31, 2022. On this date, an independent appraiser assessed the fair value of the building to be $140,000 and that of the equipment to be $103,000. Account Titles and Explanation (To adjust the Buildings account to fair value) (To eliminate the accumulated depreciation) 54,000 Prepare the necessary general journal entries, if any, to revalue the building and the equipment as at December 31, 2022, using the asset adjustment method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) (To eliminate the accumulated depreciation) (To adjust the Equipment account to fair value) $200,000 80,000 Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Current Attempt in Progress
A partial statement of financial position of Cullumber Ltd. on December 31, 2022, showed the following property, plant, and
equipment assets accounted for under the cost model (accumulated depreciation includes depreciation for 2022):
Buildings
Less: Accumulated depreciation
Equipment
Less: Accumulated depreciation
(a)
$298,000
98,000
$134,000
Cullumber 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). Cullumber applies IFRS and has decided to adopt the revaluation model for its
building and equipment, effective December 31, 2022. On this date, an independent appraiser assessed the fair value of the building
to be $140,000 and that of the equipment to be $103,000.
Account Titles and Explanation
(To adjust the Buildings
account to fair value)
(To eliminate the accumulated
depreciation)
54.000
Prepare the necessary general journal entries, if any, to revalue the building and the equipment as at December 31, 2022, using
the asset adjustment method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If
no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.)
(To eliminate the accumulated depreciation)
(To adjust the Equipment
account to fair value)
$200,000
80,000
Debit
Credit
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