Dower Corporation prepares its financial statements according to IFRS. On March 31, 2021, the company purchased equipment for $240,000. The equipment is expected to have a six-year useful life with no residual value. Dower uses the straight-line depreciation method for all equipment. On December 31, 2021, the end of the company’s fiscal year, Dower chooses to revalue the equipment to its fair value of $220,000.Required:1. Calculate depreciation for 2021.2. Prepare the journal entry to record the revaluation of the equipment.3. Calculate depreciation for 2022.4. Repeat requirement 2 assuming that the fair value of the equipment at the end of 2021 is $195,000.
Dower Corporation prepares its financial statements according to IFRS. On March 31, 2021, the company purchased equipment for $240,000. The equipment is expected to have a six-year useful life with no residual value. Dower uses the straight-line depreciation method for all equipment. On December 31, 2021, the end of the company’s fiscal year, Dower chooses to revalue the equipment to its fair value of $220,000.Required:1. Calculate depreciation for 2021.2. Prepare the journal entry to record the revaluation of the equipment.3. Calculate depreciation for 2022.4. Repeat requirement 2 assuming that the fair value of the equipment at the end of 2021 is $195,000.
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
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 11P
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Dower Corporation prepares its financial statements according to IFRS. On March 31, 2021, the company purchased equipment for $240,000. The equipment is expected to have a six-year useful life with no residual value. Dower uses the
Required:
1. Calculate depreciation for 2021.
2. Prepare the
3. Calculate depreciation for 2022.
4. Repeat requirement 2 assuming that the fair value of the equipment at the end of 2021 is $195,000.
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