Larkspur Inc owns a building with a carrying amount of $1.60 million as at January 1, 2023. On that date. Larkspur's management determined that the building's location is no longer suitable for the company's operations and decided to dispose of the building by sale. Larkspur is preparing financial statements for the fiscal year ended December 31, 2023. As at that date, management had an authorized plan in place to sell the building, the building met all criteria for classification as held for sale, and the building's estimated fair value less costs to sell was $0.48 million. The building's depreciation expense for 2023 would amount to $160,000. (a) Prepare the journal entry required on December 31, 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter 0 for the amounts. List debit entry before credit entry) Date December 31, 2023 Account Titles and Explanation Debit Credit

Larkspur Inc owns a building with a carrying amount of $1.60 million as at January 1, 2023. On that date. Larkspur's management determined that the building's location is no longer suitable for the company's operations and decided to dispose of the building by sale. Larkspur is preparing financial statements for the fiscal year ended December 31, 2023. As at that date, management had an authorized plan in place to sell the building, the building met all criteria for classification as held for sale, and the building's estimated fair value less costs to sell was $0.48 million. The building's depreciation expense for 2023 would amount to $160,000. (a) Prepare the journal entry required on December 31, 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter 0 for the amounts. List debit entry before credit entry) Date December 31, 2023 Account Titles and Explanation Debit Credit

Name: View PoliciesCurrent Attempt in ProgressLarkspur Inc. owns a building
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: View PoliciesCurrent Attempt in ProgressLarkspur Inc. owns a building with a carrying amount of $1.60 million as at January 1, 2023. On that date. Larkspur's managementdetermined that the building's location is no longer suitable for the company's o

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

On June 4, 2023, Tricon Corporation, a calendar - year corporation, purchased and began operating the Bandst Restaurant. Of the total purchase price to acquire the Bandst Restaurant, $46,744 is allocated to goodwill. How much, if any, of the $46,744 purchase price of the business that was allocated to goodwill will be deductible by Tricon Corporation in 2023?
Manila Company is engaged in leasing heavy equipment. On December 1, 2020, the entity bought a second hand heavy equipment for P375,000. In December 2020, the entity incurred P75,000 for a major overhaul to put the equipment in good running condition. The equipment is available for the intended use on December 31, 2020. The equipment has an estimated useful life of 5 years. Depreciation is on a straight line basis. On April 1, 2021, Manila Company leased the equipment to Makati Company for 2 years up to March 31, 2023. The lease fee is P15,000 per month. Mkati Company paid P180,000 on April 1, 2021, the lease fee for one year. During 2021, Manila Company spent P7,000 for minor repairs and P3,000 for transporation of the equipment to Makati Company. Required: Prepare journal entries on the books of the lessor for 2020 and 2021.
On July 31, 2020, Lee Co. a public company decides to put one of the divisions up for sale so that it can focus on further developing its other division. The capital assets of the division up for sale (recorded to the PPE account), were purchased January 1, 2016 with an original cost of $990,000. The annual depreciation is $33,000. The fair value of the building on July 31, 2020 was $840,000. The costs to sell were $12,000. The income statement on December 31, 2020 of the entity before any adjustments for the asset held for sale was as follows: $8,600,000 $3,500,000 $1,000,000 $240,000 $1,200,000 $798,000 Revenue Cost of goods sold Administrative expenses Depreciation expense Other Expenses Income tax expense Net income 1,862,000 The income statement details for the asset held for sale is as follows: $3,200,000 $1,600,000 $300,000 $33,000 $400,000 $260,100 $606,900 Revenue Cost of goods sold Administrative expenses Depreciation expense Other Expenses Income tax expense Net income…
On July 1, 2020, Sheffield Ltd., a publicly listed company, acquired assets from Bramble Ltd. On the transaction date, a reliable, independent valuator assessed the fair values of these assets as follows: Manufacturing plant (building #1) $399,580 Storage warehouse (building #2) 209,940 Machinery (in building #1) 74,700 Machinery (in building #2) 45,000 The buildings are owned by the company, and the land that the buildings are situated on is owned by the local municipality and is provided free of charge to the owner of the buildings to encourage local employment.In exchange for the acquisition of these assets, Sheffield issued 145,750 common shares. Sheffield’s shares are thinly traded (that is, traded in relatively low volume leading to more volatile price changes than most public companies). In the most recent sale of Sheffield’s shares on the Toronto Stock Exchange, 510 shares were sold for $5 per share. At the time of acquisition, both buildings were…
On July 1, 2021, Company A purchased land and buildings and agreed to rent the facility to a non-affiliated company on a month-by- month basis. Pertinent details follow: i. The company paid 6.0million fortheinvestmentpropertyplus200,000 in related legal fees. The purchase price was allocated 80% to the building and 20% to the land. ii. The estimated useful life of the building is 30 years at which time the salvage value is expected to be $0. iii. The company uses the straight-line method to depreciate all depreciable assets. iv. An appraisal valued the investment property at $6.4 million as at December 31, 2021, year-end-5.1millionbuildingand1.3 million land. Required (1) Prepare the journal entry to record the purchase of the property. (2) Prepare the year-end adjusting entries for 2021 assuming that the company elects to use the cost model to account for investment property. (3) Prepare the year-end adjusting entries for 2021 assuming that the company elects to use the fair value…
On July 1, 2020, ABC Incorporated accepted several office equipment from a shareholder with original cost of P2,000,000. On the same date, the items had aggregate market value totalling to P1,500,000. No entry has been made by ABC since no consideration was given up for these items. Moreover, cost incurred to recondition the donated items amounted to P100,000 and were charged to operations during the period. How much should be property be initially recognized?
On July 1, 2020, Sheffield Ltd., a publicly listed company, acquired assets from Bramble Ltd. On the transaction date, a reliable, independent valuator assessed the fair values of these assets as follows: Manufacturing plant (building #1) $399,580 Storage warehouse (building #2) 209,940 Machinery (in building #1) 74,700 Machinery (in building #2) 45,000 The buildings are owned by the company, and the land that the buildings are situated on is owned by the local municipality and is provided free of charge to the owner of the buildings to encourage local employment.In exchange for the acquisition of these assets, Sheffield issued 145,750 common shares. Sheffield’s shares are thinly traded (that is, traded in relatively low volume leading to more volatile price changes than most public companies). In the most recent sale of Sheffield’s shares on the Toronto Stock Exchange, 510 shares were sold for $5 per share. At the time of acquisition, both buildings…
On December 31, 2024, the end of the fiscal year, Revolutionary Industries completed the sale of its robotics business for $11.2 million. The robotics business segment qualifies as a component of the entity, according to GAAP. Consider the following additional information: The book value of the assets of the segment was $8.1 million at the time of the sale. The income from operations of the segment during 2024 was $5.1 million. Pretax income from other continuing operations for the year totaled $13.1 million. The income tax rate is 25 %. Prepare the lower portion of the 2024 income statement beginning with income from continuing operations before income taxes. Note: Loss amounts should be indicated with a minus sign. Enter your answers in whole dollars and not in millions. For example, $4,000,000 rather than $4.