G-Waste Limited, a leading waste management company, acquired a parcel of land on January 1, 2014 at a fair value of Ghc250,000. The land would be used as a dumpingsite for the estimated period of 4 years. At the end of the dumping period, the company is required to reclaim the land by recovering with gravel and grassing at an estimated cost of Ghc95,000. The prevailing discount rate for 1year Government of Ghana Treasury bill is 21%. Required: 1) Describe how G-Waste should account and disclose this transaction in its 2014 and 2015 Financial Statements.
G-Waste Limited, a leading waste management company, acquired a parcel of land on January 1, 2014 at a fair value of Ghc250,000. The land would be used as a dumpingsite for the estimated period of 4 years. At the end of the dumping period, the company is required to reclaim the land by recovering with gravel and grassing at an estimated cost of Ghc95,000. The prevailing discount rate for 1year Government of Ghana Treasury bill is 21%. Required: 1) Describe how G-Waste should account and disclose this transaction in its 2014 and 2015 Financial Statements.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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G-Waste Limited, a leading waste management company, acquired a parcel of land on January 1, 2014 at a fair value of Ghc250,000. The land would be used as a dumpingsite for the estimated period of 4 years. At the end of the dumping period, the company is required to reclaim the land by recovering with gravel and grassing at an estimated cost of Ghc95,000. The prevailing discount rate for 1year Government of Ghana Treasury bill is 21%.
Required:
1) Describe how G-Waste should account and disclose this transaction in its 2014 and 2015 Financial Statements.
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