On January 1, 2023, Blossom Ltd. acquires a building at a cost of $200,000. The building is expected to have a 20-year life and no residual value. The asset is accounted for under the revaluation model, using the asset adjustment method. Revaluations are carried out every three years. On December 31, 2025, the fair value of the building is appraised at $175,000, and on December 31, 2028, its fair value is $120,000. Blossom applies IFRS. Prepare the journal entries required on December 31, 2025, and the journal entry required on December 31, 2028, to revalue the building, if Blossom uses the proportionate method. (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 O for the amounts. List all debit entries before credit entries. Do not round intermediate calculations. Round final answers to O decimal places, e.g. 5,275.) Date ec. 31, 2025 :. 31, 2028 Account Titles and Explanation Buildings Accumulated Depreciation - Buildings Revaluation Surplus (OCI) Revaluation Surplus (OCI) Accumulated Depreciation - Buildings Revaluation Gain or Loss Buildings Debit 5,000 19,118 Credit

On January 1, 2023, Blossom Ltd. acquires a building at a cost of $200,000. The building is expected to have a 20-year life and no residual value. The asset is accounted for under the revaluation model, using the asset adjustment method. Revaluations are carried out every three years. On December 31, 2025, the fair value of the building is appraised at $175,000, and on December 31, 2028, its fair value is $120,000. Blossom applies IFRS. Prepare the journal entries required on December 31, 2025, and the journal entry required on December 31, 2028, to revalue the building, if Blossom uses the proportionate method. (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 O for the amounts. List all debit entries before credit entries. Do not round intermediate calculations. Round final answers to O decimal places, e.g. 5,275.) Date ec. 31, 2025 :. 31, 2028 Account Titles and Explanation Buildings Accumulated Depreciation - Buildings Revaluation Surplus (OCI) Revaluation Surplus (OCI) Accumulated Depreciation - Buildings Revaluation Gain or Loss Buildings Debit 5,000 19,118 Credit

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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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

On January 1, 2023, Blossom Ltd. acquires a building at a cost of $200,000. The building is expected to have a 20-year life and no
residual value. The asset is accounted for under the revaluation model, using the asset adjustment method. Revaluations are carried
out every three years. On December 31, 2025, the fair value of the building is appraised at $175,000, and on December 31, 2028, its
fair value is $120,000. Blossom applies IFRS.
Prepare the journal entries required on December 31, 2025, and the journal entry required on December 31, 2028, to revalue the
building, if Blossom uses the proportionate method. (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 O for the amounts. List all debit entries before
credit entries. Do not round intermediate calculations. Round final answers to O decimal places, e.g. 5,275.)
Date
ec. 31, 2025
c. 31, 2028
V
Account Titles and Explanation
Buildings
Accumulated Depreciation - Buildings
Revaluation Surplus (OCI)
Revaluation Surplus (OCI)
Accumulated Depreciation - Buildings
Revaluation Gain or Loss
Buildings
Debit
5,000
19,118
Credit

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