Exercise 6:Durian Ltd. owns an office building which it uses for administrative purposes with a depreciatedhistorical cost of $2 million on 1 July 20x5, a useful life of 20 years. The company adopts therevaluation model for its office building and records revaluations using the netting method aswell amortizes revaluation surplus annually. Indicators of impairment and/or reversal ofimpairment existed at 30 June 20x6, 20x7 and 20x8.The information below shows relevant asset measurements at various dates:Year ended 30 JuneFair valueCost of disposalValue-in-use20x6$1,700,000$85,000$1,550,00020x7$1,400,000$80,000$1,350,00020x8$1,428,000$128,000$1,310,0004 |PageAfter a reorganisation on 1 January 20x9, this property was let to a third party and reclassifiedas an investment property applying Durian's policy of the fair value model. An independentvaluer assessed the property to have a fair value of $1.8 million at 1 January 20x9, which hadrisen to $1.9 million at 30 June 20x10. This building was sold on 1 July 20x10 for $2 million.Required:1. Prepare journal entries to record the transactions relating to the transfer on 1 July 20x5to 1 July 20x10.2. Prepare extracts from Durian's Statement of Comprehensive Income and Statement ofFinancial Position for the year ended 30 June 20x10 in respect to the above property.

Every company maintains its records under which it prepares the financial statements which include…

Durian Ltd. owns an office building which it uses for administrative purposes with a depreciated historical cost of $2 million on 1 July 20x5, a useful life of 20 years. The company adopts the revaluation model for its office building and records revaluations using the netting method as well amortizes revaluation surplus annually. Indicators of impairment and/or reversal of impairment existed at 30 June 20x6, 20x7 and 20x8. The information below shows relevant asset measurements at various dates:

Durian Ltd. owns an office building which it uses for administrative purposes with a depreciated historical cost of $2 million on 1 July 20x5, a useful life of 20 years. The company adopts the revaluation model for its office building and records revaluations using the netting method as well amortizes revaluation surplus annually. Indicators of impairment and/or reversal of impairment existed at 30 June 20x6, 20x7 and 20x8. The information below shows relevant asset measurements at various dates:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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