Sunland Corporation owns and manages a small 10-store shopping centre, which it classifies as an investment property. Sunland has May 31 year end and initially recognized the property at its acquisition cost of $10.8 million on June 2, 2022. The acquisition cost consisted of the purchase price of $10 million, costs to survey and transfer the property of $469,000, and legal fees to acquire the property of $331,000. Sunland determines that approximately 25% of the shopping centre's value is attributable to the land, with the remainder attributable to the building. The following fair values are determined: Date May 31, 2023 May 31, 2024 Your answer is correct. Date Assume that Sunland decides to apply the cost model. What journal entries, if any, are required each year? (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 0 for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) May 31, 2023 May 31, 2024 ÷ Fair Value May 31, 2025 + $10,480,000 $10,370,000 Land, at cost Account Titles and Explanation Depreciation Expense Accumulated Depreciation - Buildings Depreciation Expense Accumulated Depreciation - Buildings Depreciation Expense Accumulated Depreciation - Buildings Buildings, at cost less accumulated depreciation Debit How will the investment property be reported on each year-end statement of financial position? $ $ 194000 SUNLAND CORPORATION Statement of Financial Position (Partial) May 31, 2023 $ 194000 $ 194000 May 31, 2024 Credit $ $ 194000 194000 194000 M
Sunland Corporation owns and manages a small 10-store shopping centre, which it classifies as an investment property. Sunland has May 31 year end and initially recognized the property at its acquisition cost of $10.8 million on June 2, 2022. The acquisition cost consisted of the purchase price of $10 million, costs to survey and transfer the property of $469,000, and legal fees to acquire the property of $331,000. Sunland determines that approximately 25% of the shopping centre's value is attributable to the land, with the remainder attributable to the building. The following fair values are determined: Date May 31, 2023 May 31, 2024 Your answer is correct. Date Assume that Sunland decides to apply the cost model. What journal entries, if any, are required each year? (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 0 for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) May 31, 2023 May 31, 2024 ÷ Fair Value May 31, 2025 + $10,480,000 $10,370,000 Land, at cost Account Titles and Explanation Depreciation Expense Accumulated Depreciation - Buildings Depreciation Expense Accumulated Depreciation - Buildings Depreciation Expense Accumulated Depreciation - Buildings Buildings, at cost less accumulated depreciation Debit How will the investment property be reported on each year-end statement of financial position? $ $ 194000 SUNLAND CORPORATION Statement of Financial Position (Partial) May 31, 2023 $ 194000 $ 194000 May 31, 2024 Credit $ $ 194000 194000 194000 M
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sunland Corporation owns and manages a small 10-store shopping centre, which it classifies as an investment property. Sunland has a
May 31 year end and initially recognized the property at its acquisition cost of $10.8 million on June 2, 2022. The acquisition cost
consisted of the purchase price of $10 million, costs to survey and transfer the property of $469,000, and legal fees to acquire the
property of $331,000. Sunland determines that approximately 25% of the shopping centre's value is attributable to the land, with the
remainder attributable to the building. The following fair values are determined:
Date
May 31, 2023
May 31, 2024
Your answer is correct.
Date
Assume that Sunland decides to apply the cost model. What journal entries, if any, are required each year? (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. Record journal entries in the order presented in the problem. List all
debit entries before credit entries.)
May 31, 2023
May 31, 2024 +
Fair Value
May 31, 2025 +
$10,480,000
$10,370,000
Land, at cost
Account Titles and Explanation
Depreciation Expense
Accumulated Depreciation - Buildings
Depreciation Expense
Accumulated Depreciation - Buildings
Depreciation Expense
Accumulated Depreciation - Buildings
Buildings, at cost less accumulated depreciation
Debit
How will the investment property be reported on each year-end statement of financial position?
$
$
194000
SUNLAND CORPORATION
Statement of Financial Position (Partial)
May 31, 2023
$
194000
$
194000
May 31, 2024
Credit
$
$
194000
194000
194000
M
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