On December 31, 20X1, management of Plexion Corporation committed to a plan for selling an office building and its related equipment that were, prior to December 31, 20X1, in productive use and classified as Non-Current Assets. Both assets are available for immediate sale. The building has a carrying amount (i.e. net book value) of $838,000 and a fair value less cost to sell of $938,000. The equipment has a carrying amount (i.e. net book value) of $316,000 and a fair value less cost to sell of $238,000. Required: Calculate the amount that each asset will be reported at on the Statement of Financial Position and the amount of any gain or loss that will be reported in the Profit and Loss Statement for the year ended December 31, 20X1. Note: Management expects to sell both assets in 20X2.
On December 31, 20X1, management of Plexion Corporation committed to a plan for selling an office building and its related equipment that were, prior to December 31, 20X1, in productive use and classified as Non-Current Assets. Both assets are available for immediate sale. The building has a carrying amount (i.e. net book value) of $838,000 and a fair value less cost to sell of $938,000. The equipment has a carrying amount (i.e. net book value) of $316,000 and a fair value less cost to sell of $238,000. Required: Calculate the amount that each asset will be reported at on the Statement of Financial Position and the amount of any gain or loss that will be reported in the Profit and Loss Statement for the year ended December 31, 20X1. Note: Management expects to sell both assets in 20X2.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On December 31, 20X1, management of Plexion Corporation committed to a plan for selling an office building and its related equipment that were, prior to December 31, 20X1, in productive use and classified as Non-Current Assets.
Both assets are available for immediate sale.
- The building has a carrying amount (i.e. net book value) of $838,000 and a fair value less cost to sell of $938,000.
- The equipment has a carrying amount (i.e. net book value) of $316,000 and a fair value less cost to sell of $238,000.
Required: Calculate the amount that each asset will be reported at on the Statement of Financial Position and the amount of any gain or loss that will be reported in the Profit and Loss Statement for the year ended December 31, 20X1. Note: Management expects to sell both assets in 20X2.
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