The historical cost of land and building of Airbag Ltd that purchased three years ago are $500 000 and $2 000 000 respectively. The building is depreciated using the straight- line method over a 20-year useful life with no residual value and land assume to have an indefinite useful life. Airbag Ltd decides to switch to a revaluation model for Building. The fair value of the building is $1 300 000 and the tax rate is 25 percent (25%). As a result of revaluation, the building's useful life increases to 25 years. REQUIRED Provide the journal entries to record the revaluation.
The historical cost of land and building of Airbag Ltd that purchased three years ago are $500 000 and $2 000 000 respectively. The building is depreciated using the straight- line method over a 20-year useful life with no residual value and land assume to have an indefinite useful life. Airbag Ltd decides to switch to a revaluation model for Building. The fair value of the building is $1 300 000 and the tax rate is 25 percent (25%). As a result of revaluation, the building's useful life increases to 25 years. REQUIRED Provide the journal entries to record the revaluation.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 7RE: Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of...
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![The historical cost of land and building of Airbag Ltd that purchased three years ago are
$500 000 and $2000 000 respectively. The building is depreciated using the straight-
line method over a 20-year useful life with no residual value and land assume to have an
indefinite useful life. Airbag Ltd decides to switch to a revaluation model for Building.
The fair value of the building is $1 300 000 and the tax rate is 25 percent (25%). As a
result of revaluation, the building's useful life increases to 25 years.
REQUIRED
Provide the journal entries to record the revaluation.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fba99e415-6143-4d16-b5bd-ce250cd2d313%2Fbcb6d2f5-b16a-4137-997a-3913eba98858%2F8it0afm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The historical cost of land and building of Airbag Ltd that purchased three years ago are
$500 000 and $2000 000 respectively. The building is depreciated using the straight-
line method over a 20-year useful life with no residual value and land assume to have an
indefinite useful life. Airbag Ltd decides to switch to a revaluation model for Building.
The fair value of the building is $1 300 000 and the tax rate is 25 percent (25%). As a
result of revaluation, the building's useful life increases to 25 years.
REQUIRED
Provide the journal entries to record the revaluation.
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