Parnevik Group uses revaluation accounting for a class of equipment it uses in its golf club refurbishing business. The equipment was purchased on January 2, 2019, for €500,000; it has a 10-year useful life with no residual value. Parnevik has the following information related to the equipment. (Assume that estimated useful life and residual value does not change during the periods presented below.)
Date Fair Value
January 2, 2019....................€500,000
December 31, 2019.................468,000
December 31, 2020.................380,000
December 31, 2021.................355,000
Instructions
a. Prepare all entries related to the equipment for 2019.
b. Determine the amounts to be reported by Parnevik at December 31, 2020 and 2021, as Equipment, Other Comprehensive Income, Depreciation Expense, Impairment Loss, and Accumulated Other Comprehensive Income.
c. Prepare the entry for any revaluation adjustments at December 31, 2020 and 2021.
d. Prepare the entries for the sale of the equipment by Parnevik on January 2, 2022, for €330,000.