Question
In: Accounting
Parnell Company acquired construction equipment on January 1, 2017, at a cost of $75,200. The equipment...
Parnell Company acquired construction equipment on January 1, 2017, at a cost of $75,200. The equipment was expected to have a useful life of five years and a residual value of $11,000 and is being depreciated on a straight-line basis. On January 1, 2018, the equipment was appraised and determined to have a fair value of $70,600, a salvage value of $11,000, and a remaining useful life of four years. In measuring property, plant, and equipment subsequent to acquisition under IFRS, Parnell would opt to use the revaluation model in IAS 16.
Assume that a U.S.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes.
Required:
-
Prepare journal entries for this equipment for the years ending December 31, 2017, and December 31, 2018, under (1) U.S. GAAP and (2) IFRS.
-
Prepare the entry(ies) that Parnell would make on the December 31, 2018 conversion worksheet to convert U.S. GAAP balances to IFRS.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Parnell Company acquired construction equipment on January 1, 2017, at a cost of $76,000. The equipment...
Parnell Company acquired construction equipment on January 1,
2017, at a cost of $76,000. The equipment was expected to have a
useful life of six years and a residual value of $10,000 and is
being depreciated on a straight-line basis. On January 1, 2018, the
equipment was appraised and determined to have a fair value of
$70,200, a salvage value of $10,000, and a remaining useful life of
five years. In measuring property, plant, and equipment subsequent
to acquisition under...
Parnell Company acquired construction equipment on January 1, 2017, at a cost of $72,700. The equipment...
Parnell Company acquired construction equipment on January 1,
2017, at a cost of $72,700. The equipment was expected to have a
useful life of five years and a residual value of $12,000 and is
being depreciated on a straight-line basis. On January 1, 2018, the
equipment was appraised and determined to have a fair value of
$67,800, a salvage value of $12,000, and a remaining useful life of
four years. In measuring property, plant, and equipment subsequent
to acquisition under...
Parnell Company acquired construction equipment on January 1, 2017, at a cost of $71,700. The equipment...
Parnell Company acquired construction equipment on January 1,
2017, at a cost of $71,700. The equipment was expected to have a
useful life of five years and a residual value of $10,000 and is
being depreciated on a straight-line basis. On January 1, 2018, the
equipment was appraised and determined to have a fair value of
$67,700, a salvage value of $10,000, and a remaining useful life of
four years. In measuring property, plant, and equipment subsequent
to acquisition under...
Parnell Company acquired construction equipment on January 1, 2017, at a cost of $75,000. The equipment...
Parnell Company acquired construction equipment on January 1,
2017, at a cost of $75,000. The equipment was expected to have a
useful life of five years and a residual value of $13,000 and is
being depreciated on a straight-line basis. On January 1, 2018, the
equipment was appraised and determined to have a fair value of
$69,300, a salvage value of $13,000, and a remaining useful life of
four years. In measuring property, plant, and equipment subsequent
to acquisition under...
Bracy Company acquired a new piece of construction equipment on January 1, 2015, at a cost...
Bracy Company acquired a new piece of construction equipment on
January 1, 2015, at a cost of $92,300. The equipment was expected
to have a useful life of 7 years and a residual value of $16,000
and is being depreciated on a straight-line basis.
On January 1, 2016, the equipment was appraised and determine to
have a fair value of $92,920, a salvage value of $16,000, and a
remaining useful life of six years.
a. Determine the amount of depreciation...
Bracy Company acquired a new piece of construction equipment on January 1, 2015, at a cost...
Bracy Company acquired a new piece of construction equipment on
January 1, 2015, at a cost of $141,000. The equipment was expected
to have a useful life of 14 years and a residual value of $22,000
and is being depreciated on a straight-line basis. On January 1,
2016, the equipment was appraised and determined to have a fair
value of $153,690, a salvage value of $22,000, and a remaining
useful life of thirteen years.
a.
Determine the amount of depreciation...
Hirsch Company acquired equipment at the beginning of 2017 at a cost of $128,000. The equipment...
Hirsch Company acquired equipment at the beginning of 2017 at a
cost of $128,000. The equipment has a five-year life with no
expected salvage value and is depreciated on a straight-line basis.
At December 31, 2017, Hirsch compiled the following information
related to this equipment:
Expected future cash flows from
use of the equipment
$
109,300
Present value of expected future
cash flows from use of the equipment
95,000
Fair value (selling price less
costs to dispose)
90,910
Assume that...
Hirsch Company acquired equipment at the beginning of 2017 at a cost of $124,300. The equipment...
Hirsch Company acquired equipment at the beginning of 2017 at a
cost of $124,300. The equipment has a five-year life with no
expected salvage value and is depreciated on a straight-line basis.
At December 31, 2017, Hirsch compiled the following information
related to this equipment:
Expected future cash flows from use of the equipment
$ 106,400
Present value of expected future cash flows from use of the
equipment 90,700 ...
Equipment was acquired on January 1, 2014, at a cost of $170,000. The equipment was originally...
Equipment was acquired on January 1, 2014, at a cost of
$170,000. The equipment was originally estimated to have a salvage
value of $10,000 and an estimated life of 10 years. Depreciation
has been recorded through December 31, 2016, using the
straight-line method. On January 1, 2017, the estimated salvage
value was revised to $16,000 and the useful life was revised to a
total of 8 years.
Determine the depreciation expense for 2017.
Link Company acquired Tuna Inc. on January 1, 2017. On January 1, 2017 all of Tuna's...
Link Company acquired Tuna Inc. on January 1, 2017. On January
1, 2017 all of Tuna's assets and liabilities had a FVs = BV except
for the following:
Land was undervalued by $30,000
Buildings were overvalued by $45,000 (20-yr remaining useful
life)
Equipment was undervalued by $90,000 (5-yr remaining useful
life)
In addition, Tuna had internally developed a customer list with
an appraised value of $150,000 and a 10-yr remaining useful life.
Link originally acquired Tuna at the FV of...
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