Question

In: Accounting

XYZ Company purchased a land for $ 1,000,000 during 2017 and chooses the revaluation model in...

XYZ Company purchased a land for $ 1,000,000 during 2017 and chooses the revaluation model in accounting for its land.  

Below are the following information:

Date

Fair Value

December 31, 2017

$ 1,120,000

December 31, 2018

$ 870,000

December 31, 2019

$ 1,110,000

a ) What is the amount of unrealized gain on revaluation - land for the year 2017? ___Unrealized gain

b ) How much is the accumulated other comprehensive income for the year 2017 to be recognized in the balance sheet? ____accumulated other comprehensive income

c ) What is the amount of unrealized gain on revaluation - land for the year 2018? ____

d ) How much is the impairment loss for the year 2018? ____

e ) How much is the accumulated other comprehensive income for the year 2018 to be recognized in the balance sheet? ____

f ) How much is the recovery of impairment loss and revaluation gain on land for the year 2019? _____

g ) What is the amount of unrealized gain on revaluation - land for the year 2019?  ____

h ) If the land was sold on January 10, 2020, for $ 1,115,000, how much is the gain on sale of land? ____

i ) How much is the accumulated other comprehensive income to be recycled to the retained earnings as a result of the gain on sale of land? ____

Solutions

Expert Solution

a. Unrealized gain on revaluation as on 31 December 2017 = $1120000- $1000000 =$120000.

b. Accumulated other comprehensive income to be recognised in balance sheet for the year 2017 = $(1120000-1000000) =$120000.

c. Total Unrealized gain(loss) on revaluation as on 31 December 2018 = $870000- $1120000 =$ (250000) , out of which $120000 to be charged from other comprehensive income (from accumulated revaluation surplus) and balance ie., $250000- $120000=$130000 to be charged to profit and loss A/c.

d. Total impairment loss for the year 2018 = $130000

e. Accumulated other comprehensive income to be recognised in balance sheet for the year 2018 = $(120000-120000) =$0 (nil).

f.Recovery of impairment loss for the year 2019= minimum of $(1110000-870000)340000 or $130000=$130000. Revaluation gain to be recognised in other comprehensive income for the 2019 =$340000- $130000=$210000.

g.Total Unrealized gain(loss) on revaluation as on 31 December 2019 = $1110000- $870000 =$340000.

h. Gain on sale of land =$1115000- $1110000=$5000.

i.$210000.

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

XYZ Company purchased a land for $ 1,000,000 during 2017 and chooses the revaluation model in...
XYZ Company purchased a land for $ 1,000,000 during 2017 and chooses the revaluation model in accounting for its land.   Below are the following information: Date Fair Value December 31, 2017 $ 1,120,000 December 31, 2018 $ 870,000 December 31, 2019 $ 1,110,000 A. If the land was sold on January 10, 2020, for $ 1,115,000, how much is the gain on sale of land? ____ B. How much is the accumulated other comprehensive income to be recycled to the...
ABC Corporation purchased a land for P500,000 during 2017 and chooses the revaluation model in accounting...
ABC Corporation purchased a land for P500,000 during 2017 and chooses the revaluation model in accounting for its land . The following information relates to that land , which is the only land asset owned by the company , December 31, 2017- Fair value P520,000. Dec 31, ,2018- Fair Value P470,000. December 31 , 2019- Fair Value P510,000.a) What is the amount of unrealized gain on revaluation-land for the year 2017?_______. b.) How much is the accumulated other comprehensive income...
In 1997, XYZ Company purchased several acres of land for $1,000,000. In 2019, the Federal Highway...
In 1997, XYZ Company purchased several acres of land for $1,000,000. In 2019, the Federal Highway Administration announced that it planned to build an interstate highway, with exit and entrance ramps to be located within a few miles of this property. Based on this information, the appraised value of the property on December 31, 2019, was $25 million. At what value should XYZ Company report this land in its December 31, 2019, balance sheet? Why? Which value is more relevant?...
(a) ABC Company purchased land at a cost of $400,000,000 during 2018. ABC chooses to use...
(a) ABC Company purchased land at a cost of $400,000,000 during 2018. ABC chooses to use the revaluation method of accounting for land. The fair value of the land is as follows at December 31, 2018 2019 and 2020: 2018 - $450,000,000 2019 - $360,000,000 2020 - $385,000,000 Required (a) Record the journal entries to account for revaluation of the land at 31 December 2018, 2019 and 2020. (b) Assume ABC Company chooses to apply the cost method for the...
E11.24 (LO5) (Revaluation Accounting) Croatia Company purchased land in 2019 for $300,000. The land ' s...
E11.24 (LO5) (Revaluation Accounting) Croatia Company purchased land in 2019 for $300,000. The land ' s fair value at the end of 2019 is $320,000; at the end of 2020, $280,000; and at the end of 2021, $305,000. Assume that Croatia chooses to use revaluation accounting to account for its land. Instructions Prepare the journal entries to record the land using revaluation accounting for 2019 – 2021.
Blossom Company purchased land, a building, and equipment on January 2, 2017, for $910,000. The company...
Blossom Company purchased land, a building, and equipment on January 2, 2017, for $910,000. The company paid $175,000 cash and signed a mortgage note payable for the remainder. Management's best estimate of the value of the land was $385,000; of the building, $425,000; and of the equipment, $130,000. Record the purchase. (Use Mortgage Payable for account.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually . If no entry is required, select "No Entry"...
On October 16, 2017, Smith Company purchased back its own stock. It recorded $1,000,000 as treasury...
On October 16, 2017, Smith Company purchased back its own stock. It recorded $1,000,000 as treasury stock on its balance sheet. As of December 31, 2017 (Smith's year end) the company's stock price is 15% more than it was in October. Discuss what should be recognized on the 12/31/17 financial statements and discuss and relevants GAAP concepts.
Parker Piano Company purchases a tract of land and an existing building for $1,000,000. The company...
Parker Piano Company purchases a tract of land and an existing building for $1,000,000. The company plans to remove the old building and construct a new restaurant on the site. In addition to the purchase price, Parker pays closing costs, including title insurance of $3,000. The company also pays $14,000 in property taxes, which includes $9,000 of back taxes (unpaid taxes from previous years) paid by Parker on behalf of the seller and $5,000 due for the current fiscal year...
ABC Company sold equipment on October 1, 2018, to XYZ Company for £1,000,000. It agrees to...
ABC Company sold equipment on October 1, 2018, to XYZ Company for £1,000,000. It agrees to repurchase this equipment in July 2019, for a price of £1,100,000. The proper accounting treatment for this transaction based on Select one: a. relevance b. going concern c. comparability d. substance over form
Entity A purchased a property (Land and Building) for $5,000,000 on 1 July 2017. Entity A...
Entity A purchased a property (Land and Building) for $5,000,000 on 1 July 2017. Entity A paid 60% by a cheque on 1 July 2017 and the balance was settled on 1 August 2017 through a bank transfer. The value of the land was $500,000 and the buildings $4,500,000. The expected useful life of the building is 50 years without any residual value. On 30 June 2019, the property was revalued to $7,562,208 (land $980,208 and buildings $6,582,000). On 30...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT