Following a delayering exercise, Carter vacated an office building and let it out to a third party on 30 June 2018. The building had an original cost of GHS900,000 on 1 January 2010 and was being depreciated over 50 years. It was judged to have a fair value on 30 June 2018 of GHS950,000. At the year end date of 31 December 2018 the fair value of the building was estimated at GHS1.2 million. Carter uses the fair value model for investment property. What amount will be shown in revaluation surplus at 31 December 2018 in respect of this building?

Following a delayering exercise, Carter vacated an office building and let it out to a third party on 30 June 2018. The building had an original cost of GHS900,000 on 1 January 2010 and was being depreciated over 50 years. It was judged to have a fair value on 30 June 2018 of GHS950,000. At the year end date of 31 December 2018 the fair value of the building was estimated at GHS1.2 million. Carter uses the fair value model for investment property. What amount will be shown in revaluation surplus at 31 December 2018 in respect of this building?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Mr. Wonder purchased a machine amounting to P7,000,000 on January 1, 2013 providing the newest kind of technology to improve their operations. It has a useful life of 20 years and a salvage value of P500,000. However, on June 30, 2018, they decided to dispose it to liquidate some of its debts. Therefore, they classified it as held for sale. The fair value of the machine on that date P5,100,000 and the cost of disposal is P100,000. On November 30, 2019, the company decided again to continue to use it since they were able to obtain funding from their investors through follow-on offering of additional shares to pay their currently maturing obligations. On this date, the fair value of the machine is P4,900,000 and the cost of disposal is P50,000. How much is the gain or loss in the reclassification in 2019? *
Sabiha Purchased an Equipment on 1st January 2016 at a cost of OMR 200,000. The equipment has zero residual value and was to be depreciated over a estimated life of 10 years. On 31st December 2019, the asset revalues to fair value of OMR 160,000. Calculate the Revaluation Gain/ (Loss) on the asset?
On January 1, 2001, MM Inc. constructed a building classified as owner occupied property at a cost of P3,000,000 with no residual value and useful life of 10 years. On December 31, 2002, there is objective evidence of impairment of the building and its value in use is measured at P1,600,000 while its fair value less cost to sell is at P1,500,000. On December 31, 2004, the value in use of the building is at P2,300,000 while its fair value less cost to sell is P1,700,000. Required: Based on the result of your audit, determine the following:__________1. Impairment loss for the year ended December 31, 2002__________2. Carrying amount of building on December 31, 2002__________3. Depreciation expense for the year ended December 31, 2003__________4. Carrying amount of building on December 31, 2004__________5. Gain on reversal of impairment loss for the year ended December 31, 2004__________6. Depreciation expense for the year ended December 31, 2005
Diamond Ltd acquired an item of polishing equipment on 1 July 2015 for $440,000. The equipment is expected to have a useful life of 10 years and the straight-line method of depreciation is to be used. It has salvage value of $40,000. On 1 July 2017, the equipment is deemed to have a fair value of $424,000 and revaluation is undertaken in accordance with the Diamond Ltd policy of measuring property, plant and equipment at fair value. The asset is still usable for next 8 years but the salvage value is determined to be zero. The asset is sold for $356,000 on 1 July 2019. Required: Provide the journal entries necessary at the following dates to account for the above transactions and events. (Ignore narrations). Show your workin • 01/07/2015 • 01/07/2017 • 01/07/2019
In 2016, Bambung Corporation acquired production machinery at a cost of £420,000. In 2019, when accumulated depreciation was £103,000, Bambung reported an impairment loss of £77,000. Now, in 2023, the machinery has a book value of £193,000. The fair value less costs to sell of the machinery is £215,000 and its value in use is £192,000. During impairment testing, Bambung recognized the possibility of a reversal of the previous impairment loss. What amount, if any, should Bambung recognize as a reversal of impairment loss under IFRS? Group of answer choices -0- £1000 £22,000 £77,000
Jason Co purchased a machinery for £100,000 on 1/1/2018. It had an estimated useful life of ten years and it was depreciated using the reducing balance method at a rate of 20%. On 1/1/20 it was decided to change the depreciation method to the straight line. There was no change to the useful life, and no residual value is anticipated. What are the accumulated depreciation and the net book value of the asset for the year ended 31 December 2021?
Diamond Ltd acquired an item of polishing equipment on 1 July 2015 for $440,000. The equipment is expected to have a useful life of 10 years and the straight-line method of depreciation is to be used. It has salvage value of $40,000. On 1 July 2017, the equipment is deemed to have a fair value of$424,000 and revaluation is undertaken in accordance with the Diamond Ltd policy of measuring property, plant and equipment at fair value. The asset is still usable for next 8 years but the salvage value is determined to be zero. The asset is sold for $356,000 on 1 July 2019. Required:Provide the journal entries necessary at the following dates to account for the above transactions and events. (Ignore narrations). Show your working. (10 marks)• 01/07/2015• 01/07/2017• 01/07/2019 Week 4Snowy Ltd acquires Pax Ltd on 1 July 2018 for $5,000,000 being the fair value of the considerationtransferred. At that date, Pax Ltd’s net identifiable assets have a fair value of $4,400,000. Goodwill of$600,000…
In 2016, TallyHo Farms acquired production machinery at a cost of £430,000. In 2019, when accumulated depreciation was £180,000, Bambung reported an impairment loss of £78,000. Now, in 2023, the machinery has a book value of £142,000. The fair value less selling costs of the machinery is £273,000 and its value in use is £215,000. During impairment testing, Bambung recognized the possibility of a reversal of the previous impairment loss. What amount, if any, should Bambung recognize as a reversal of impairment loss under IFRS? Group of answer choices £58,000 £131,000 £73,000 £78,000 PreviousNext
(c) Pablo vacated an office building and let it out to a third party on 1 July 2020. The building had an original cost of $1,200,000 on 1 January 2015 and was being depreciated over 40 years using the double declining balance method until 31st December 2016. The estimated residual value of the building is $283,000. On 1 January 2017, the company decided to switch to straight-line depreciation with no change in the estimated residual value of the building. The building was judged to have a fair value on 1 July 2020 of $809,316. At the year-end date of 31" December 2020, the fair value of the building was estimated at $960,000. ii. Pablo uses the fair value model for investment property. Required What amount will be shown as revaluation surplus (deficit) on 31 December 2020 in respect of this building? Round your answer to the nearest $. Answer 1. What amount will be credited or debited to profit or loss for the year ended 31st December 2020? State whether this amount is a profit or…