Question

Garrett Corporation paid $300,000 to acquire land, buildings, and equipment. At the time of acquisition, Garrett paid $20,000 for an appraisal, which revealed the following values: land, $140,000; buildings, $175,000; and equipment, $35,000.

Required:

1.	What cost should the company assign to the land, buildings, and equipment, respectively?
2.	Assume that Garrett uses IFRS and chooses to use the revaluation model to value its property, plant, and equipment. At the end of the year, the book value of the land, buildings, and equipment are $128,000, $154,000, and $29,000, respectively. The company determines that the fair value of the land, buildings, and equipment at the end of year is $148,000, $156,000, and $26,000, respectively. Prepare the journal entries that Garrett should make to value its property, plant, and equipment.

CHART OF ACCOUNTS
Garrett Corporation
General Ledger
ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 171 Land 181 Building 185 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings 395 Revaluation Surplus	REVENUE 411 Sales Revenue EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 891 Loss on Impairment 910 Income Tax Expense

Answer 1