LIST OF ACCOUNTS: Accumulated DepletionAccumulated Depreciation - AutomobilesAccumulated Depreciation - BuildingsAccumulated Depreciation - EquipmentAccumulated Depreciation - Furniture and FixturesAccumulated Depreciation - MachineryAccumulated Depreciation - VehiclesAccumulated Impairment Losses - BuildingAccumulated Impairment Losses - EquipmentAccumulated Impairment Losses - LandAccumulated Impairment Losses - MachineryAccumulated Impairment Losses - MineAccumulated Impairment Losses - PatentsAccumulated Impairment Losses - Tools and DiesAccumulated Impairment Losses - VehiclesAsset Retirement ObligationBuildingsCashCommon SharesContribution ExpenseCost of Goods SoldDeferred Revenue - Government GrantsDepreciation ExpenseEquipmentFurniture and FixturesGain on Disposal of AutomobilesGain on Disposal of BuildingGain on Disposal of EquipmentGain on Disposal of Furniture and FixturesGain on Disposal of MachineryGain on Disposal of VehiclesGain on Sale of LandInterest ExpenseInterest PavableInventoryInvestment PropertyLandLiability for Site RestorationLoss on Disposal of AutomobilesLoss on Disposal of BuildingLoss on Disposal of EquipmentLoss on Disposal of MachineryLoss on Disposal of VehiclesLoss on ExpropriationLoss on ImpairmentLoss on Sale of LandMachineryMineral ResourcesNo EntryNotes PayableOil PropertyRecovery of Loss from ImpairmentRepairs and Maintenance ExpenseRetained EarningsRevaluation Surplus (OCI)Revenue - Government GrantsRoyalty ExpenseVehicles Blue Spruce Corporation is a public company that manufactures farm implements, such as tractors, combines, and wagons. BlueSpruce uses the revaluation model per IAS 16, and records asset revaluations using the elimination method. (This means the balance inthe Accumulated Depreciation account is eliminated against the asset account just prior to revaluation of the asset to fair value.) Apiece of manufacturing equipment included in the property, plant, and equipment section on Blue Spruce's statement of financialposition was purchased on December 31, 2022, for a cost of $111,000. The equipment was expected to have a remaining useful life of5 years, with benefits being received evenly over the 5 years. Residual value of the equipment was estimated to be $11,000.Consider the following two situations:Situation 1: At December 31, 2023, no formal revaluation is performed, as management determines that the carrying amount of theproperty, plant, and equipment is not materially different from its fair value.Situation 2: At December 31, 2023, a formal revaluation is performed and the independent appraisers assess the equipment's fairvalue to be $100,000. During the revaluation process, it is determined that the remaining useful life of the equipment is four years,with a residual value of $12,000.At December 31, 2024, no formal revaluation is performed, as management determines that the carrying amount of the property,plant, and equipment is not materially different from its fair value. The equipment is sold on March 31, 2025, for $69,000. Prepare any journal entries required under situation 1 described above for: (1) the fiscal year ended December 31, 2023; (2) thefiscal year ended December 31, 2024; and (3) the disposal of the equipment on March 31, 2025. (Credit account titles areautomatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titlesand enter O for the amounts. List all debit entries before credit entries.)No.(1)(2)(3)DateAccount Titles and Explanation(To record depreciation on equipment)(To record disposal of equipment)Debit11

Accumulated Depreciation is a contra-asset account that is presented below the fixed assets in the…

Answered: Prepare any journal entries required…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter12: Nonrecognition Transactions

Section: Chapter Questions

Problem 57CP

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LIST OF ACCOUNTS:

Accumulated Depletion

Accumulated Depreciation - Automobiles

Accumulated Depreciation - Buildings

Accumulated Depreciation - Equipment

Accumulated Depreciation - Furniture and Fixtures

Accumulated Depreciation - Machinery

Accumulated Depreciation - Vehicles

Accumulated Impairment Losses - Building

Accumulated Impairment Losses - Equipment

Accumulated Impairment Losses - Land

Accumulated Impairment Losses - Machinery

Accumulated Impairment Losses - Mine

Accumulated Impairment Losses - Patents

Accumulated Impairment Losses - Tools and Dies

Accumulated Impairment Losses - Vehicles

Asset Retirement Obligation

Buildings

Cash

Common Shares

Contribution Expense

Cost of Goods Sold

Deferred Revenue - Government Grants

Depreciation Expense

Equipment

Furniture and Fixtures

Gain on Disposal of Automobiles

Gain on Disposal of Building

Gain on Disposal of Equipment

Gain on Disposal of Furniture and Fixtures

Gain on Disposal of Machinery

Gain on Disposal of Vehicles

Gain on Sale of Land

Interest Expense

Interest Pavable

Inventory

Investment Property

Land

Liability for Site Restoration

Loss on Disposal of Automobiles

Loss on Disposal of Building

Loss on Disposal of Equipment

Loss on Disposal of Machinery

Loss on Disposal of Vehicles

Loss on Expropriation

Loss on Impairment

Loss on Sale of Land

Machinery

Mineral Resources

No Entry

Notes Payable

Oil Property

Recovery of Loss from Impairment

Repairs and Maintenance Expense

Retained Earnings

Revaluation Surplus (OCI)

Revenue - Government Grants

Royalty Expense

Vehicles

Blue Spruce Corporation is a public company that manufactures farm implements, such as tractors, combines, and wagons. Blue
Spruce uses the revaluation model per IAS 16, and records asset revaluations using the elimination method. (This means the balance in
the Accumulated Depreciation account is eliminated against the asset account just prior to revaluation of the asset to fair value.) A
piece of manufacturing equipment included in the property, plant, and equipment section on Blue Spruce's statement of financial
position was purchased on December 31, 2022, for a cost of $111,000. The equipment was expected to have a remaining useful life of
5 years, with benefits being received evenly over the 5 years. Residual value of the equipment was estimated to be $11,000.
Consider the following two situations:
Situation 1: At December 31, 2023, no formal revaluation is performed, as management determines that the carrying amount of the
property, plant, and equipment is not materially different from its fair value.
Situation 2: At December 31, 2023, a formal revaluation is performed and the independent appraisers assess the equipment's fair
value to be $100,000. During the revaluation process, it is determined that the remaining useful life of the equipment is four years,
with a residual value of $12,000.
At December 31, 2024, no formal revaluation is performed, as management determines that the carrying amount of the property,
plant, and equipment is not materially different from its fair value. The equipment is sold on March 31, 2025, for $69,000.

Prepare any journal entries required under situation 1 described above for: (1) the fiscal year ended December 31, 2023; (2) the
fiscal year ended December 31, 2024; and (3) the disposal of the equipment on March 31, 2025. (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.)
No.
(1)
(2)
(3)
Date
Account Titles and Explanation
(To record depreciation on equipment)
(To record disposal of equipment)
Debit
11

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