DEF Ltd started to construct a factory on 1 April 2020; it incurred $40 million and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
DEF Ltd started to construct a factory on 1 April 2020; it incurred $40 million and $100 million on April 2020 and 1 October 2020 respectively on the construction. The construction would be financed by pool of funds dentrally managed by DEF Ltd. The pool included a loan (8% per annum) of $192 million (Loan D) and a loan (9% per annum) of $64 million (Loan E). DEF Ltd borrowed the loan D since 1 October 2018 and successfully negotiated with Hang Fung Bank for loan E on 1 July 2020. The construction was still in progress as at 31 March 2021. Loan D and E were still outstanding as at 31 March 2021. Required Briefly explain how the interest on Loan D and E should be reported in DEF Ltd's financial statements for the year ended 31 March 2021. (6 marks) Detailed calculation is necessary to show. (24 marks) (Total: 30 marks) On January 1, 2019, GHI Limited purchased a piece of machinery for production of goods. The purchase price of the machinery was $335,000. GHI Limited paid cash on the date of purchase. GHI Limited estimated that the machinery has an expected useful life of 4 years with a residual value of $15,000 on December 31, 2022. On February 15, 2021, GHI Limited disposed of machinery for cash amount of $179,000. GHI Limited adopts revaluation model for measuring machinery. For items with revaluation, it is GHI Limited's policy to eliminate accumulated depreciation against gross carrying amount of asset in a revaluation. GHI Limited usually depreciates machinery of similar type on a straight line basis. Full year of depreciation is to be charged in the year of purchase and none to be charged in the year of disposal. GHI Limited revalued the machinery twice on December 31, 2019 and December 31, 2020 and the revalued amounts were $264,000 and $185,000 respectively. Required In accordance with the requirement of IFRS (i.e. HKAS 16 Property, Plant and Equipment, prepare all journal entries that GHI Limited should make relating to the machinery: a. For the year ended December 31, 2019 and 2020. b. For the disposal of the machinery on February 15, 2021 (Total: 20 marks) (14 marks) (6 marks) DEF Ltd started to construct a factory on 1 April 2020; it incurred $40 million and $100 million on April 2020 and 1 October 2020 respectively on the construction. The construction would be financed by pool of funds dentrally managed by DEF Ltd. The pool included a loan (8% per annum) of $192 million (Loan D) and a loan (9% per annum) of $64 million (Loan E). DEF Ltd borrowed the loan D since 1 October 2018 and successfully negotiated with Hang Fung Bank for loan E on 1 July 2020. The construction was still in progress as at 31 March 2021. Loan D and E were still outstanding as at 31 March 2021. Required Briefly explain how the interest on Loan D and E should be reported in DEF Ltd's financial statements for the year ended 31 March 2021. (6 marks) Detailed calculation is necessary to show. (24 marks) (Total: 30 marks) On January 1, 2019, GHI Limited purchased a piece of machinery for production of goods. The purchase price of the machinery was $335,000. GHI Limited paid cash on the date of purchase. GHI Limited estimated that the machinery has an expected useful life of 4 years with a residual value of $15,000 on December 31, 2022. On February 15, 2021, GHI Limited disposed of machinery for cash amount of $179,000. GHI Limited adopts revaluation model for measuring machinery. For items with revaluation, it is GHI Limited's policy to eliminate accumulated depreciation against gross carrying amount of asset in a revaluation. GHI Limited usually depreciates machinery of similar type on a straight line basis. Full year of depreciation is to be charged in the year of purchase and none to be charged in the year of disposal. GHI Limited revalued the machinery twice on December 31, 2019 and December 31, 2020 and the revalued amounts were $264,000 and $185,000 respectively. Required In accordance with the requirement of IFRS (i.e. HKAS 16 Property, Plant and Equipment, prepare all journal entries that GHI Limited should make relating to the machinery: a. For the year ended December 31, 2019 and 2020. b. For the disposal of the machinery on February 15, 2021 (Total: 20 marks) (14 marks) (6 marks)
Expert Answer:
Related Book For
Intermediate Accounting
ISBN: 978-1118742976
16th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
Students also viewed these accounting questions
-
answer all these questions Regarding cash flow, which of the following is correct? O a. Selling an investment is a cash outflow. O b. Mortgage payments are a cash inflow. Insurance payments are a...
-
2x 8. Solve the initial value problem y' - (22) y = 0, y(0) = 3
-
On January 1, 2018, LMU, Inc. issued $250,000 of 6%, 10 year bonds for $216,025, yielding an effective interest rate of 8%. Semiannual interest is payable on June 30 and December 31 each year. The...
-
Three charges are arranged as shown in the figure. Find the (a) magnitude and (b) direction (angle with the x axis) of the electrostatic force on the 6.00- nC charge. In the figure, q= 3.64 nC. 0.500...
-
In the discussion on stable storage, a key assumption is that a CPU crash that corrupts a sector leads to an incorrect ECC. What problems might arise in the five crash-recovery scenarios shown in...
-
4. How are organisation health and safety procedures, health and safety signage and safe work practices going to be monitored at ANIBT Hotel? Include how you will monitor ongoing compliance. 5. What...
-
A rectangular array of elliptical fibers is shown in Figure 3.5. Derive the relationship between the fiber volume fraction and the given geometrical parameters. What is the maximum possible fiber...
-
1. The income elasticity of demand is _____ (positive/negative) for normal goods and _____ (positive/negative) for inferior goods. 2. If a 20 percent increase in income increases the quantity of...
-
Sweet Catering completed the following selected transactions during May 2016: May 1: Prepaid rent for three months, $1,200 May 5: Received and paid electricity bill, $130 May 9: Received cash for...
-
The demand for fishing poles is at its minimum during the month of December and reaches its maximum during the month of April. Fishing Hole, Inc., estimates the December demand at 50 poles. It...
-
Identify the most effective style of listening for each situation: Group of answer choices A friend calls you after the death of a family member and is seeking emotional support a) Time-oriented...
-
Investigate issues with implementing domestic biodiversity offsetting.
-
What are the benefits and drawbacks of direct regulations?
-
Describe the impact that one countrys environmental policies could have on another countrys trade.
-
Winter Games manufactures a competitive line of skis and sells its skis to retailers at a price of $225 per pair. Based on an annual volume of 5,000 pairs, the cost per pair is $185: Sports Palace, a...
-
Explain why efficiency guidelines for cost-benefit analyses applied to public investments must necessarily differ from Pareto optimality.
-
A car's motor puts out 24 000 W of power for 20 s. The car has mass of 1000 kg. Calculate the car's final speed if it accelerated from rest? What was the distance required for the acceleration? What...
-
Government is advised to tax goods whose demand curves are inelastic if the goal is to raise tax revenues. If the goal is to discourage consumption, then it ought to tax goods whose demand curves are...
-
Garfield Company purchased, on January 1, 2017, as a held-to-maturity investment, $80,000 of the 9%, 5-year bonds of Chester Corporation for $74,086, which provides an 11% return. Prepare Garfield's...
-
Revenue is recognized based on a five-step process that is applied to a company's revenue arrangements. Instructions (a) Briefly describe the five-step process. (b) Explain the importance of...
-
Jeff Heun, president of Concrete Always, agrees to construct a concrete cart path at Dakota Golf Club. Concrete Always enters into a contract with Dakota to construct the path for $200,000. In...
-
The length of a straight solenoid is \(50 \mathrm{~cm}\). If a current of 12 A flows through the solenoid produces a magnetic field of magnitude \(0.06 \mathrm{~T}\) inside it, calculate the number...
-
Two parallel rods having length \(12 \mathrm{~cm}\) and a separation of \(50 \mathrm{~cm}\) carry current from left to right. If current through wire 1 is \(10 \mathrm{~A}\) and through wire 2 is...
-
A wire segment of \(1.0 \mathrm{~m}\) and carrying a current of \(5.0 \mathrm{~A}\) is held in a plane in which it can rotate and translate with little friction. A long wire is fixed parallel to this...
Study smarter with the SolutionInn App