Question

In: Accounting

Macro Company applied revaluation accounting to plant assets with carrying amount of P4,000,000 on January 1,...

Macro Company applied revaluation accounting to plant assets with carrying amount of P4,000,000 on January 1, 2X14, useful life of four (4) years, and no residual value. Depreciation is calculated on the straight line basis. On December 31, 2X14, independent appraisers determined that the asset has a fair value of P3,750,000.

  1. Which of the following is a correct debit/credit entry in recording the depreciation for 2X14?
  2. Which of the following is a correct debit/credit entry in recording revaluation on December 31, 2X14?
  3. Which of the following information is included in the 2014 financial statements?
  4. Which of the following is a correct debit/credit entry in recording depreciation for 2X15?

Solutions

Expert Solution

For any further queries please comment me and vote me.

Thanks

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

explain the accounting entries required to record a revaluation decrement for property, plant and equipment, and...
explain the accounting entries required to record a revaluation decrement for property, plant and equipment, and explain the overall impact of those accounting entries on an entity's income statement and balance sheet. Thanks!
Caley Inc. owns a building with a carrying amount of $1.5 million, as at January 1,...
Caley Inc. owns a building with a carrying amount of $1.5 million, as at January 1, 2017. On that date, Caley s management determined that the building s location is no longer suitable for the company s operations and decided to dispose of the building by sale. Caley is preparing financial statements for the fiscal year ending December 31, 2017. As at that date, management had an authorized plan in place to sell the building, the building met all criteria...
Topic: Revaluation and Disposal On January 1, 2018, Loony Co. acquired two assets within the same...
Topic: Revaluation and Disposal On January 1, 2018, Loony Co. acquired two assets within the same class of plant and equipment. Information on these assets is as follows: Cost Useful life Machine A $3,000,000 5 years Machine B 1,800,000 3 years The machines are expected to generate benefits evenly over their useful lives. The class of plant and equipment is measure using the revaluation model.At December 31, 2018, information about the assets is as follows: Fair Value Useful Life Machine...
Assets: Thompson Inc. Panna Corporation Carrying Amount Carrying Amount Fair value Cash $400,000 $10,000 $10,000 Accounts...
Assets: Thompson Inc. Panna Corporation Carrying Amount Carrying Amount Fair value Cash $400,000 $10,000 $10,000 Accounts receivable 80,000 25,000 22,000 Inventory 100,000 70,000 75,000 Plant   500,000 165,000 175,000 Patents 100,000 25,000 25,000 Trade marks - - 20,000 Goodwill 120,000 10,000 10,000 Total Assets 1,300,000 305,000 Liabilities and Equity: Current liabilities $160,000 55,000 60,000 Long-term liabilities 100,000 65,000 60,000 Common shares (At $10 per share) 1,000,000 100,000 Retained earnings 40,000 85,000 Total liabilities and equity 1,300,000 305,000 Suppose Thompson Inc. purchased...
Assets: Thompson Inc. Panna Corporation Carrying Amount Carrying Amount Fair value Cash $400,000 $10,000 $10,000 Accounts...
Assets: Thompson Inc. Panna Corporation Carrying Amount Carrying Amount Fair value Cash $400,000 $10,000 $10,000 Accounts receivable 80,000 25,000 22,000 Inventory 100,000 70,000 75,000 Plant 500,000 165,000 175,000 Patents 100,000 25,000 25,000 Trade marks - - 20,000 Goodwill 120,000 10,000 10,000 Total Assets 1,300,000 305,000 Liabilities and Equity: Current liabilities $160,000 55,000 60,000 Long-term liabilities 100,000 65,000 60,000 Common shares (At $10 per share) 1,000,000 100,000 Retained earnings 40,000 85,000 Total liabilities and equity 1,300,000 305,000 Suppose Thompson Inc. purchased...
Sefam Ltd owns an item of plant which has a carrying amount of Rs. 2,480,000 as...
Sefam Ltd owns an item of plant which has a carrying amount of Rs. 2,480,000 as at 1 April 2014. It is being depreciated at 12½% per annum on a reducing balance basis. The plant is used to manufacture a line of fabric which has been suffering a slow decline in sales. Sefam has estimated that the plant will be retired from use on 31 March 2018. The estimated net cash flows from the use of the plant and their...
The US Financial Accounting Standards Board does not allow revaluation of non-current assets to fair value,...
The US Financial Accounting Standards Board does not allow revaluation of non-current assets to fair value, but it does make it compulsory to account for the impairment costs associated with non-current assets as per FASB Statement No. 144 Accounting for the Impairment or Disposal of Long-Lived Assets. Required: What implications do you think these rules have for the relevance and representational faithfulness of US corporate financial statements??
Explain the following terms as they relate to assets: (a) carrying amount (b) deductible temporary differences...
Explain the following terms as they relate to assets: (a) carrying amount (b) deductible temporary differences (c) taxable temporary differences (d) tax base.
On 1 January 2008, a company bought plant at a price of $500 000. The plant...
On 1 January 2008, a company bought plant at a price of $500 000. The plant was to be depreciated using the straight line method over its useful life of 5 years (after which it was estimated that it would have no residual value). For tax purposes, wear and tear is allowed on the following basis: 50% in the first year 30% in the second year 20% in the third year On 31 December 2011 the plant was sold for...
True/False Questions Carrying amounts of the combinee's identifiable net assets are disregarded in accounting for a...
True/False Questions Carrying amounts of the combinee's identifiable net assets are disregarded in accounting for a business combination. In a business combination that establishes a parent company-subsidiary affiliation, the subsidiary prepares journal entries on the date of the combination to increase the carrying amounts of its net assets to current fair values. Only the balance sheet is consolidated on the date of a business combination of a parent company and subsidiary. All out-of-pocket costs of a business combination reduce additional...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT