On July 1, 2020, Concord Ltd., a publicly listed company, acquired assets from Riverbed Ltd. On...

 

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On July 1, 2020, Concord Ltd., a publicly listed company, acquired assets from Riverbed Ltd. On the transaction date, a reliable, independent valuator assessed the fair values of these assets as follows: Manufacturing plant (building #1) Storage warehouse (building #2) Machinery (in building # 1). Machinery (in building #2) $399,920 209,980 75,000 45,000 The buildings are owned by the company, and the land that the buildings are situated on is owned by the local municipality and is provided free of charge to the owner of the buildings to encourage local employm In exchange for the acquisition of these assets, Concord issued 146,000 common shares. Concord's shares are thinly traded (that is, traded relatively low volume leading to more volatile price changes than mo public companies). In the most recent sale of Concord's shares on the Toronto Stock Exchange, 720 shares were sold for $5 per share. At the time of acquisition, both buildings were considered to have an expect remaining useful life of 10 years, the machinery in building #1 was expected to have a remaining useful life of 3 years, and the machinery in building #2 was expected to have a useful life of 9 years. Concord use straight-line depreciation with no residual values. At December 31, 2020, Concord's fiscal year end, Concord recorded the correct depreciation amounts for the six months that the assets were in use. An independent appraisal concluded that the assets had the following fair values: Manufacturing plant (building #1) Storage warehouse (building #2) At December 31, 2021, Concord once again retained an independent appraiser and determined that the fair value of the assets was: Manufacturing plant (building #1) $339,690 Storage warehouse (building #2) 160,000 $387,600 178,600 *(a) Prepare the journal entries required for 2020 and assuming the buildings are accounted for under the revaluation model (using the asset adjustment method), and that machinery account. for under the cost model. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record the amounts for Building #1 and #2 and for Machinery seperately. Do not combine these amounts. Round answers to 0 decimal places, e.g. 5,275.) Debit Date Account Titles and Explanation July 1, 2020 Credit Prepare the journal entries required for 2020 and 2021, assuming that the buildings are accounted for under the revaluation model (using the asset adjustment method), and that the machinery is accounted for under the cost model. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record the amounts for Building # 1 and #2 and for Machinery seperately. Do not combine these amounts. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation July 1, 2020 Dec. 31, 2020 Dec. 31, 2020 Dec. 31, 2020 Dec. 31, 2020 Dec. 31, 2020 (To record depreciation on Building #1) (To record depreciation on Building #2) (To record depreciation on Machinery in Building #1) (To record depreciation on Machinery in Building #2) Debit Credit On July 1, 2020, Concord Ltd., a publicly listed company, acquired assets from Riverbed Ltd. On the transaction date, a reliable, independent valuator assessed the fair values of these assets as follows: Manufacturing plant (building #1) Storage warehouse (building #2) Machinery (in building # 1). Machinery (in building #2) $399,920 209,980 75,000 45,000 The buildings are owned by the company, and the land that the buildings are situated on is owned by the local municipality and is provided free of charge to the owner of the buildings to encourage local employm In exchange for the acquisition of these assets, Concord issued 146,000 common shares. Concord's shares are thinly traded (that is, traded relatively low volume leading to more volatile price changes than mo public companies). In the most recent sale of Concord's shares on the Toronto Stock Exchange, 720 shares were sold for $5 per share. At the time of acquisition, both buildings were considered to have an expect remaining useful life of 10 years, the machinery in building #1 was expected to have a remaining useful life of 3 years, and the machinery in building #2 was expected to have a useful life of 9 years. Concord use straight-line depreciation with no residual values. At December 31, 2020, Concord's fiscal year end, Concord recorded the correct depreciation amounts for the six months that the assets were in use. An independent appraisal concluded that the assets had the following fair values: Manufacturing plant (building #1) Storage warehouse (building #2) At December 31, 2021, Concord once again retained an independent appraiser and determined that the fair value of the assets was: Manufacturing plant (building #1) $339,690 Storage warehouse (building #2) 160,000 $387,600 178,600 *(a) Prepare the journal entries required for 2020 and assuming the buildings are accounted for under the revaluation model (using the asset adjustment method), and that machinery account. for under the cost model. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record the amounts for Building #1 and #2 and for Machinery seperately. Do not combine these amounts. Round answers to 0 decimal places, e.g. 5,275.) Debit Date Account Titles and Explanation July 1, 2020 Credit Prepare the journal entries required for 2020 and 2021, assuming that the buildings are accounted for under the revaluation model (using the asset adjustment method), and that the machinery is accounted for under the cost model. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record the amounts for Building # 1 and #2 and for Machinery seperately. Do not combine these amounts. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation July 1, 2020 Dec. 31, 2020 Dec. 31, 2020 Dec. 31, 2020 Dec. 31, 2020 Dec. 31, 2020 (To record depreciation on Building #1) (To record depreciation on Building #2) (To record depreciation on Machinery in Building #1) (To record depreciation on Machinery in Building #2) Debit Credit

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uly 12020 Manufacuring plant building 1 Storage warehouse building 2 Machinery in build... View the full answer