Purple Company acquires an office building at a cost of $1,000 on January 1, 2021. The...
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Purple Company acquires an office building at a cost of $1,000 on January 1, 2021. The building expects to have a 30-year useful life with residual value of $100 at the end of the estimated useful life. The asset is accounted for under the revaluation model (proportional method) and revaluations are carried out every year. The company uses the straight-line method to record depreciation and both the useful life and residual value remain unchanged throughout revaluation. Also assume that the company always adjusts for depreciation expense difference under the revaluation model and the cost model. The fair value of the office building is appraised at $1,100, $900 and $1,000 on December 31, 2021, 2022 and 2023, respectively. Determine the amount for "Accumulated Depreciation - Office Building" after revaluation on December 31, 2021. Round your answer to the nearest dollar if necessary. (7 marks) Answer: Purple Company acquires an office building at a cost of $1,000 on January 1, 2021. The building expects to have a 30-year useful life with residual value of $100 at the end of the estimated useful life. The asset is accounted for under the revaluation model (proportional method) and revaluations are carried out every year. The company uses the straight-line method to record depreciation and both the useful life and residual value remain unchanged throughout revaluation. Also assume that the company always adjusts for depreciation expense difference under the revaluation model and the cost model. The fair value of the office building is appraised at $1,100, $900 and $1,000 on December 31, 2021, 2022 and 2023, respectively. Determine the amount for "Accumulated Depreciation - Office Building" after revaluation on December 31, 2021. Round your answer to the nearest dollar if necessary. (7 marks) Answer:
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Office building at cost Jan 1 2021 1000 Useful life 30 years Residual value 100 Model used ... View the full answer
Related Book For
South western Federal Taxation 2018 Corporations Partnerships Estates and Trusts
ISBN: 978-1337385985
41st edition
Authors: William H. Hoffman, William A. Raabe, James C. Young, Annette Nellen, David M. Maloney
Posted Date:
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