Question 1Joyce Limited purchased land and building on 1st January, 2012 for GH¢200,000 (landGH¢60,000 and buildings GH¢140,000). While there is no depreciation on land, however thecompany uses 5% reducing balance method on building. On 1st January 2016 the land wasrevalued to GH¢75,000 and the buildings to GH¢135,000. Depreciation on buildings is computedat 5% reducing balance. The financial statements are prepared on a yearly basis.Required:Calculate the revaluation reserve for the year ended 31st December, 2016. LBC manufactures mechanical talkative recorder, which trade under the name Talkative'. In theyear ended 31* December 2017, 10,000 Talkatives were manufactured and the related costs were:GHCMaterials3,000Labour4,000Depreciation of Machinery2,000Factory ratesSelling expenses1,0003,000Expenses at head office2,000Abnormal loss3,000In addition to the information above, at 31* December 2017, there were 2,000 Talkatives ininventory.Required:Assuming that these have a resale value of GH¢5 and a Net Realisable Value of GH¢1.15 each,what value should be placed on the closing inventory?

A revaluation reserve seems to be an accounting concept used when a corporation adds a line category…

loyce Limited purchased land and building on 1st January, 2012 for GH¢200,000 (land GH¢60,000 and buildings GH¢140,000). While there is no depreciation on land, however the company uses 5% reducing balance method on building. On Ist January 2016 the land was revalued to GH¢75,000 and the buildings to GH¢135,000. Depreciation on buildings is computed at 5% reducing balance. The financial statements are prepared on a yearly basis. Required: Calculate the revaluation reserve for the year ended 31st December, 2016.

loyce Limited purchased land and building on 1st January, 2012 for GH¢200,000 (land GH¢60,000 and buildings GH¢140,000). While there is no depreciation on land, however the company uses 5% reducing balance method on building. On Ist January 2016 the land was revalued to GH¢75,000 and the buildings to GH¢135,000. Depreciation on buildings is computed at 5% reducing balance. The financial statements are prepared on a yearly basis. Required: Calculate the revaluation reserve for the year ended 31st December, 2016.

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

Calculate the depreciation for both assets.
B) Buyer Ltd owns an item of equipment which was purchased on 1 July 2012 at a cost of GH¢450,000. It is being depreciated on straight line basis over its useful economic life of 15 years. At 1 April 2017, the equipment was no longer needed by the entity. It was decided that the asset would be sold and a buyer was being sought. The asset is advertised for sale at a price of GH¢275,000 which was a reasonable reflection of its fair value. It is anticipated that transportation cost of GH¢30,000 will be incurred to deliver the item to the buyer. The sale is expected to occur before 31 March 2018. Require: Explain how to account for the above transaction in accordance with IFRS 5 Non-current asset held for sale and discontinued operation, for the year ended 30th June 2017.
Dengar
In December 2005, SHOWEE Company exchanged an old machine, with a cost P6,000,000 and 50% depreciated, for a dissimilar used machine and paid a cash difference of P1,500,000. The fair value of the old machine was determined to be P2,000,000. SHOWEE should record the machine at 6,000,000 3,500,000 3,000,000 2,000,000
Mario Ltd purchased a machine for GHS 50,000 on 1 January 20X1. The machine was judged to have a five-year life with a residual value of GHS 5,000. During 20X3, the market for the product declined and the machine was sold on 1 January 20X4 for GHS 7,000. According to IAS 16 Property, Plant and Equipment, what was the loss on disposal? A. GHS 27,000 B. GHS 13,000 C. GHS 16,000 D. GHS 23,000
On January 1, 2017, Jace and Naya Corporation acquired equipment at a cost of ₱1,800,000. Jace and Naya adopted the sum-of- the-years’-digits method of depreciation for this equipment and had been recording depreciation over an estimated life of eight years, with no residual value. At the beginning of 2020, a decision was made to change to the straight-line method of depreciationfor this equipment. The depreciation expense for 2020 would bea. ₱150,000 c. ₱360,000b. ₱93,750 d. ₱225,000
An entity purchased an office building with a useful life of 50 years for GHC5.5 million on 1 January 2006. (The amount attributable to land was negligible). The entity used the building as its head office for five years until 31 December 2010, when the entity moved its business into larger premises. The building was reclassified on that date as an investment property and leased under a 40-year lease. The fair value of the head office at 31 December 2010 was GHC6 million. Explain the treatment of the office building on the assumption that the entity uses the fair value model for investment properties
The company adopted the straight-line depreciation method. Record the 15% depreciation on the plant and equipment purchased On 1 December 2020 for R125 000.
Barbosa Ltd purchased an item of plant for GHS 300,000 which was to be depreciated over its useful life of 10 years. On 1 January 20X5, the plant was revalued to its fair value of GHS 600,000, with no revision to its remaining useful life. On 1 January 20X6, the plant was sold for GHS 700,000. In accordance with IAS 16 Property, Plant and Equipment, what was the profit on disposal to be included in Barbosa Ltd's income statement for the year ended 31 December 20X6?
Talparo Company purchased land in 2015 for $300,000. The land’s fair value at the end of 2015 is $320,000; atthe end of 2016, $280,000; and at the end of 2017, $305,000. Assume that Talparo chooses to use revaluationaccounting to account for its land.Required:Prepare the journal entries to record the land using revaluation accounting from 2015 until 2017.
During the year ended 30 June 2023, CoCo Berhad had the following transactions: a. In July 2022, CoCo Berhad acquired a building for RM800, 000 with an estimated useful life of 20 years. It is the company's policy to depreciate the building on a straight line basis. On 30 June 2023, the building had been revalued to RM950, 000. It is the company's policy to provide a full year's depreciation in the year of purchase and none in the year of disposal. For tax purposes, initial allowance of 10% and annual allowance of 3% are given for such buildings. The company has no intention to dispose the revalued building. b. CoCo Berhad had trade receivables of RM1, 500, 000 and an allowance for doubtful debts of 10% has been made for the year. Income tax rate is 25% for the year ended 30 June 2023. Required: Calculate the deferred tax asset or deferred tax liabilities as at 30 June 2023 arising from the above transactions. Please step by step answer
Mickelson Inc. owns land that it purchased on January 1, 2000, for $450,000. At December 31, 2014, its current value is $770,000 as determined by appraisal. At what amount should Mickelson report this asset on its December 31, 2014, balance sheet? Explain.