Question
In: Accounting
Required information [The following information applies to the questions displayed below.] Dower Corporation prepares its financial...
Required information
[The following information applies to the questions
displayed below.]
Dower Corporation prepares its financial statements according to
IFRS. On March 31, 2021, the company purchased equipment for
$240,000. The equipment is expected to have a six-year useful life
with no residual value. Dower uses the straight-line depreciation
method for all equipment. On December 31, 2021, the end of the
company’s fiscal year, Dower chooses to revalue the equipment to
its fair value of $220,000.
Required:
1.Calculate depreciation for 2021.
2-a. Calculate the revaluation of the
equipment.
2-b. Prepare the journal entry to record the
revaluation of the equipment.
3.Calculate depreciation for 2022.
- Req 1
- Req 2A
- Req 2B
- Req 3
Prepare the journal entry to record the revaluation of the equipment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)
| No | Event | General Journal | Debit | Credit |
|---|---|---|---|---|
| 1 | 1 | Equipment | ||
| Accumulated depreciation |
- Req 3
-
Calculate depreciation for 2022. (Round your denominator answer to 2 decimal places.)
Straight-Line Depreciation Choose Numerator: / Choose Denominator: = Annual Depreciation Expense Formula Cost minus residual / Estimated Useful Life (years) = Depreciation Expense Amounts / = 0 - Req 4A
- Req 4B
-
Calculate the revaluation of the equipment assuming that the fair value of the equipment at the end of 2021 is $195,000. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)
Before Revaluation Conversion Factor After Revaluation Equipment 195000/210000 Accumulated depreciation 195000/210000 Book value 195000/210000
- Req 4B
-
Assume that the fair value of the equipment at the end of 2021 is $195,000. Prepare the journal entry to record the revaluation of the equipment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole number.)
Journal entry worksheet
- Record the revaluation of the equipment.
-
Note: Enter debits before credits.
Event General Journal Debit Credit 1
Solutions
Expert Solution
** Please note - All figures are in "$"
| (All Figures in $) | ||||
| 1 | Calculation for Depreciation for the year 2021 | |||
| Cost of Equipment | 240000 | |||
| Expected Life( In years) | 6 | |||
| Annual Depreciation(Straight line method) | 40000 | |||
| Equipment was purchased on 31st March 2021 | ||||
| So Depreciation for the year 2021 will be accounted for 9 Months | ||||
| 40000*9/12 | 30000 | |||
| 2 a | Revaluation of the Equipment | |||
| Before Revaluation | Adjustment | After revaluation | ||
| Equipment | 240000 | -20000 | 220000 | |
| Accumulated Depreciation | -30000 | 30000 | Nil | |
| Book Value | 210000 | 10000 | 220000 | |
| 2 b | Journal Entry to record the revaluation of Equipment | |||
| (in $) | ||||
| Date | Particulars | Debit | Credit | |
| 31-12-2021 | Equipment A/c | 10000 | ||
| Revaluation Reserve A/c | 10000 | |||
| (Being Equipment revalued ) | ||||
| 3 | Calculation for Depreciation for the year 2022 | |||
| Value of Equipment | 220000 | |||
| Remaining Life of Equipment (In Years) | 5.25 | |||
| Depreciation (using Straight Line Method) | ||||
| 220000/5.25 | 41906 | |||
ekkarill92 answered 1 year agoRelated Solutions
Required information [The following information applies to the questions displayed below.] Dower Corporation prepares its financial...
Required information
[The following information applies to the questions
displayed below.]
Dower Corporation prepares its financial statements according to
IFRS. On March 31, 2021, the company purchased equipment for
$216,000. The equipment is expected to have a six-year useful life
with no residual value. Dower uses the straight-line depreciation
method for all equipment. On December 31, 2021, the end of the
company’s fiscal year, Dower chooses to revalue the equipment to
its fair value of $234,000.
Required:
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The following financial statements and additional information
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Comparative Balance Sheets
June 30, 2017 and 2016
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Assets
Cash
$
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$
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Accounts receivable, net
99,500
74,000
Inventory
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121,000
Prepaid expenses
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10,000
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272,000
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$
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Comparative Balance Sheets
June 30, 2017 and 2016
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2016
Assets
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$
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55,000
Inventory
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92,500
Prepaid expenses
4,800
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201,700
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$
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$
36,000
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The following financial statements and additional information
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IKIBAN INC.
Comparative Balance Sheets
June 30, 2017 and 2016
2017
2016
Assets
Cash
$
105,100
$
48,000
Accounts receivable, net
71,000
55,000
Inventory
67,800
92,500
Prepaid expenses
4,800
6,200
Total current assets
248,700
201,700
Equipment
128,000
119,000
Accum.
depreciation—Equipment
(29,000
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(11,000
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Total assets
$
347,700
$
309,700
Liabilities and Equity
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$
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Comparative Balance Sheets
June 30, 2017 and 2016
2017
2016
Assets
Cash
$
96,100
$
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Accounts receivable, net
93,500
70,000
Inventory
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115,000
Prepaid expenses
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The following financial statements and additional information
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Comparative Balance Sheets
June 30, 2017 and 2016
2017
2016
Assets
Cash
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$
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Accounts
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65,000
51,000
Inventory
63,800
86,500
Prepaid
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115,000
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Total
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$
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Liabilities and
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Pink
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Income Statement
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