Question

Brower Corporation owns a manufacturing plant in the country of Oust. On December 31, 2014, the plant had a book value of $5,000,000 and an estimated fair value of $8,000,000. Oust’s government has clearly indicated that it will expropriate the plant during the coming year and will reimburse Brower for only 40% of the plant’s estimated fair value.

Required:
What journal entry (if any) should Brower make on December 31, 2014, to record the intended expropriation?



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  • CreatedSeptember 10, 2014
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