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Koh Brothers Limited acquired a company for $54 million on June 30, 2023 to produce hospital machines and equipment. The company estimated the factory has a useful life of 25 years with $2 million in residual value at the end of its useful life. The company adopted a straight line depreciation method for all its property, plant, and equipment. The factory's market value appredicated steadily to $60 million at the end of the company's financial year, December 31, 2023. On June 30, 2024, the factory was sold for cash at $59 million.  Show the journal entries if Koh Brothers Limited account for the factory using:  (a) the cost method  (b) the revaluation method

Koh Brothers Limited acquired a company for $54 million on June 30, 2023 to produce hospital machines and equipment. The company estimated the factory has a useful life of 25 years with $2 million in residual value at the end of its useful life. The company adopted a straight line depreciation method for all its property, plant, and equipment. The factory's market value appredicated steadily to $60 million at the end of the company's financial year, December 31, 2023. On June 30, 2024, the factory was sold for cash at $59 million.  Show the journal entries if Koh Brothers Limited account for the factory using:  (a) the cost method  (b) the revaluation method

FINANCIAL ACCOUNTING
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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Koh Brothers Limited acquired a company for $54 million on June 30, 2023 to produce hospital machines and equipment. The company estimated the factory has a useful life of 25 years with $2 million in residual value at the end of its useful life. The company adopted a straight line depreciation method for all its property, plant, and equipment. The factory's market value appredicated steadily to $60 million at the end of the company's financial year, December 31, 2023. On June 30, 2024, the factory was sold for cash at $59 million. 

Show the journal entries if Koh Brothers Limited account for the factory using: 

(a) the cost method 

(b) the revaluation method

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