Jamoka Corporation is a public company that manufactures farm implements, such as tractors, combines, and wagons. Jamoka
Question:
Consider the following two situations:
Situation 1: At December 31, 2017, no formal revaluation is performed, as management determines that the carrying amount of the property, plant, and equipment is not materially different from its fair value.
Situation 2: At December 31, 2017, a formal revaluation is performed and the independent appraisers assess the equipment's fair value to be $89,000. During the revaluation process, it is determined that the remaining useful life of the equipment is four years, with residual value of $11,000.
At December 31, 2018, no formal revaluation is performed, as management determines that the carrying amount of the property, plant, and equipment is not materially different from its fair value. The equipment is sold on March 31, 2019, for $62,000.
Instructions
(a) Prepare any journal entries required under situation 1 described above for:
(1) the fiscal year ended December 31, 2017;
(2) the fiscal year ended December 31, 2018; and
(3) the disposal of the equipment on March 31, 2019.
(b) Prepare any journal entries required under situation 2 described above for:
(1) the fiscal year ended December 31, 2017;
(2) the fiscal year ended December 31, 2018; and
(3) the disposal of the equipment on March 31, 2019.
(c) Assume that Jamoka uses the proportional method to record asset revaluations under the revaluation model. Prepare any journal entries required under situation 2 described above for:
(1) the fiscal year ended December 31, 2017;
(2) the fiscal year ended December 31, 2018; and
(3) the disposal of the equipment on March 31, 2019.
(d) What is the equivalent standard under ASPE?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For
Intermediate Accounting
ISBN: 978-1119048534
11th Canadian edition Volume 1
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
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