Green Ocean Company acquired land and building for $300,000 on 1st January 2012. The land at...

 

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Green Ocean Company acquired land and building for $300,000 on 1st January 2012. The land at that date comprised 20% of the total cost. At that date the estimated useful life of the building was 45 years with a residual value of $30,000. Required: 1. Assume that Green Ocean has decided to recognize land and building under the cost model approach, prepare a three-year depreciation schedule for the buildings under the reducing balance method. 2. Assume that Green Ocean has decided to recognize land and building under the revaluation model approach with revaluations taking place every three years. On 1st January 2015 three years later, a surveyor valued the land and building at $400,000 of which $80,000 was attributable to land. The estimated useful life and residual value of the buildings remained the same. I 2.1 Prepare the journal entries required to record these transactions on 1st January 2015 under the reducing balance method. 2.2 Compute and record the depreciation for the year ended 31st December 2015 under the straight-line method. Green Ocean Company acquired land and building for $300,000 on 1st January 2012. The land at that date comprised 20% of the total cost. At that date the estimated useful life of the building was 45 years with a residual value of $30,000. Required: 1. Assume that Green Ocean has decided to recognize land and building under the cost model approach, prepare a three-year depreciation schedule for the buildings under the reducing balance method. 2. Assume that Green Ocean has decided to recognize land and building under the revaluation model approach with revaluations taking place every three years. On 1st January 2015 three years later, a surveyor valued the land and building at $400,000 of which $80,000 was attributable to land. The estimated useful life and residual value of the buildings remained the same. I 2.1 Prepare the journal entries required to record these transactions on 1st January 2015 under the reducing balance method. 2.2 Compute and record the depreciation for the year ended 31st December 2015 under the straight-line method.

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Answer 1 Assume that Green Ocean has decided to recognize land and building under the cost model app... View the full answer