Accounts PayableAccumulated Depreciation - BuildingsAccumulated Depreciation - EquipmentAccumulated Depreciation - Leasehold ImprovementsAccumulated Depreciation - MachineryAccumulated Depreciation - Vehicle OverhaulAccumulated Depreciation - VehiclesAdvertising ExpenseAsset Retirement ObligationBuildingsCashCommon SharesContributed Surplus - Donated CapitalCost of Goods SoldDeferred Revenue - Government GrantsDepreciation ExpenseDonation RevenueEquipmentFinance ExpenseGain on Disposal of BuildingsGain on Disposal of EquipmentGain on Disposal of MachineryGain on Disposal of VehiclesGain on Vehicle OverhaulGain or Loss in Value of Investment PropertyGST ReceivableInterest ExpenseInterest PayableInventoryInvestment PropertyLandLand ImprovementsLegal ExpenseLoss on Disposal of BuildingsLoss on Disposal of EquipmentLoss on Disposal of MachineryLoss on Disposal of VehiclesLoss on Vehicle OverhaulMachineryMineral ResourcesMortgage PayableNo EntryNotes PayableOffice ExpensePrepaid ExpensesPrepaid InsurancePurchase DiscountsRepairs and Maintenance ExpenseRevaluation Gain or LossRevaluation Surplus (AOCI)Revaluation Surplus (OCI)Revenue - Government GrantsSalaries and Wages ExpenseSales RevenueService RevenueSuppliesTenant Deposits LiabilityVehicle OverhaulVehicles Pharoah Holdings Inc., a publicly listed company in Canada, ventured into construction of a mega shopping mall in Edmonton, which israted as the largest shopping mall in North America. The company's board of directors, after much market research, decided thatinstead of selling the shopping mall to a local investor who had approached them several times with excellent offers that he steadilyincreased during the year of construction, the company would hold this property for the purposes of capital appreciation and earningrental income from mall tenants. The construction of the mall ended on December 31, 2022. Pharoah Holdings retained the servicesof a real estate company to find and attract many important retailers to rent space in the shopping mall. The shopping mall was fullyoccupied soon after construction was completed.According to the company's accounting department, the total construction cost of the shopping mall was $68 million. The companyused an independent appraiser to determine the mall's fair value annually. According to the appraisal, the fair values of the shoppingmall at December 31, 2023, and at each subsequent year end were:2023202420252026$68 million$79 million$84 million$79 millionThe independent appraiser felt that the useful life of the shopping mall was 20 years and its residual value was $14 million.Note that the mall's rental income and expenses would be the same under both options, and thus can be omitted from the analysis forthis exercise. Prepare the necessary journal entries for 2024, 2025, and 2026 if it decides to treat the shopping mall as an investment propertyunder IAS 40: Use fair value model. (Credit account titles are automatically indented when the amount is entered. Do not indentmanually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before creditentries. Record journal entries in the order presented in the problem. Enter amounts in dollars instead of million dollars.)Date1Account Titles and ExplanationDebitCredit

IAS 40 is an International Accounting Standard that provides guidelines for accounting for…

Answered: Pharoah Holdings Inc., a publicly…

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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Question

Accounts Payable

Accumulated Depreciation - Buildings

Accumulated Depreciation - Equipment

Accumulated Depreciation - Leasehold Improvements

Accumulated Depreciation - Machinery

Accumulated Depreciation - Vehicle Overhaul

Accumulated Depreciation - Vehicles

Advertising Expense

Asset Retirement Obligation

Buildings

Cash

Common Shares

Contributed Surplus - Donated Capital

Cost of Goods Sold

Deferred Revenue - Government Grants

Depreciation Expense

Donation Revenue

Equipment

Finance Expense

Gain on Disposal of Buildings

Gain on Disposal of Equipment

Gain on Disposal of Machinery

Gain on Disposal of Vehicles

Gain on Vehicle Overhaul

Gain or Loss in Value of Investment Property

GST Receivable

Interest Expense

Interest Payable

Inventory

Investment Property

Land

Land Improvements

Legal Expense

Loss on Disposal of Buildings

Loss on Disposal of Equipment

Loss on Disposal of Machinery

Loss on Disposal of Vehicles

Loss on Vehicle Overhaul

Machinery

Mineral Resources

Mortgage Payable

No Entry

Notes Payable

Office Expense

Prepaid Expenses

Prepaid Insurance

Purchase Discounts

Repairs and Maintenance Expense

Revaluation Gain or Loss

Revaluation Surplus (AOCI)

Revaluation Surplus (OCI)

Revenue - Government Grants

Salaries and Wages Expense

Sales Revenue

Service Revenue

Supplies

Tenant Deposits Liability

Vehicle Overhaul

Vehicles

Pharoah Holdings Inc., a publicly listed company in Canada, ventured into construction of a mega shopping mall in Edmonton, which is
rated as the largest shopping mall in North America. The company's board of directors, after much market research, decided that
instead of selling the shopping mall to a local investor who had approached them several times with excellent offers that he steadily
increased during the year of construction, the company would hold this property for the purposes of capital appreciation and earning
rental income from mall tenants. The construction of the mall ended on December 31, 2022. Pharoah Holdings retained the services
of a real estate company to find and attract many important retailers to rent space in the shopping mall. The shopping mall was fully
occupied soon after construction was completed.
According to the company's accounting department, the total construction cost of the shopping mall was $68 million. The company
used an independent appraiser to determine the mall's fair value annually. According to the appraisal, the fair values of the shopping
mall at December 31, 2023, and at each subsequent year end were:
2023
2024
2025
2026
$68 million
$79 million
$84 million
$79 million
The independent appraiser felt that the useful life of the shopping mall was 20 years and its residual value was $14 million.
Note that the mall's rental income and expenses would be the same under both options, and thus can be omitted from the analysis for
this exercise.

Prepare the necessary journal entries for 2024, 2025, and 2026 if it decides to treat the shopping mall as an investment property
under IAS 40: Use fair value model. (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. Record journal entries in the order presented in the problem. Enter amounts in dollars instead of million dollars.)
Date
1
Account Titles and Explanation
Debit
Credit

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