Octagon Limited purchase PPE on January 1, 2015 at the following costs architect fees $6.8m Land $12.5m,
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Question:
Octagon Limited purchase PPE on January 1, 2015 at the following costs architect fees $6.8m Land $12.5m, Building $15m and installation cost $3.7m. The building has an economic life of 40 years with a residual value of $1.2m. At the end of December 2016, the market value of the land and building was $45m with a residual value of $2.m. The company’s year-end is December 31 each year. Required:
a. Prepare the extract of financial statements for the year ending 31 December 2015 using the cost method.
b. Prepare the extract of financial statements for the year ending 31 December 2016 using the Revaluation Method or the Fair Value Method?
Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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