Gangnam Ltd acquired a shopping mall on 1 January 2017 for $9,000,000 and included it as...
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Gangnam Ltd acquired a shopping mall on 1 January 2017 for $9,000,000 and included it as Property, Plant and Equipment under IAS 16. The shopping mall has an estimated useful life of 40 years, although the remaining leasehold period on which the shopping mall is built on is 50 years. Gangnam adopts the straight-line basis of depreciation. There is no residual value estimated. On 1 January 2023, the building was revalued to $7,800,000 by an independent valuer. Useful life was not affected by the revaluation. It is Gangnam's policy to make the annual transfer of excess depreciation between the revaluation surplus and retained earnings within equity. Required: (a) Prepare journal entries to record the revaluation on 1 January 2023. (14 marks) (b) Prepare all necessary journal entries to account for the depreciation of the revalued building for the year ended 31 December 2023. Gangnam Ltd acquired a shopping mall on 1 January 2017 for $9,000,000 and included it as Property, Plant and Equipment under IAS 16. The shopping mall has an estimated useful life of 40 years, although the remaining leasehold period on which the shopping mall is built on is 50 years. Gangnam adopts the straight-line basis of depreciation. There is no residual value estimated. On 1 January 2023, the building was revalued to $7,800,000 by an independent valuer. Useful life was not affected by the revaluation. It is Gangnam's policy to make the annual transfer of excess depreciation between the revaluation surplus and retained earnings within equity. Required: (a) Prepare journal entries to record the revaluation on 1 January 2023. (14 marks) (b) Prepare all necessary journal entries to account for the depreciation of the revalued building for the year ended 31 December 2023.
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Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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