Golf Inc. is a public company that has been in business since the 1980s. It owns and operates over 40 golf courses across Canada. It also owns and operates pro shops and dining facilities. On 1 November 20X4 GI announced it was going to sell three of its golf courses that were underperforming. They have had declining memberships over the past couple of years. GI is currently looking for a buyer. The asking prices are reasonable, and at the time of listing, the real estate agents expected that the courses will be sold before the spring of next year. On 1 November 20X4, the carrying amount of the land is $50,000 but the fair market value is $750,000. The equipment (that is, golf carts), has a carrying amount of $600,000 ($900,000 cost) and a fair market value of $450,000. There was no change to the estimated fair values on 31 December 20X4. The company accepted an offer on 15 January 20X5. The total proceeds for the sale were $1,075,000. The company has a 31 December year-end. Required: 1. How would GI account for the disposal of the three golf courses? Explain the impact on the financial statements. 2. Prepare the journal entries required on 1 November 20X4, 31 December 20X4, and 15 January 20X5.

Golf Inc. is a public company that has been in business since the 1980s. It owns and operates over 40 golf courses across Canada. It also owns and operates pro shops and dining facilities. On 1 November 20X4 GI announced it was going to sell three of its golf courses that were underperforming. They have had declining memberships over the past couple of years. GI is currently looking for a buyer. The asking prices are reasonable, and at the time of listing, the real estate agents expected that the courses will be sold before the spring of next year. On 1 November 20X4, the carrying amount of the land is $50,000 but the fair market value is $750,000. The equipment (that is, golf carts), has a carrying amount of $600,000 ($900,000 cost) and a fair market value of $450,000. There was no change to the estimated fair values on 31 December 20X4. The company accepted an offer on 15 January 20X5. The total proceeds for the sale were $1,075,000. The company has a 31 December year-end. Required: 1. How would GI account for the disposal of the three golf courses? Explain the impact on the financial statements. 2. Prepare the journal entries required on 1 November 20X4, 31 December 20X4, and 15 January 20X5.

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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