Chi Shing Limited (CS) has acquired two properties and details are as follows: Date of acquisition...

 

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Chi Shing Limited ("CS") has acquired two properties and details are as follows: Date of acquisition Cost Useful life Purpose of usage Property Phoenix Property Dragon 1 January 2021 1 July 2021 $3,000,000 $2,000,000 30 years 10 years Head office Rented out to a third party CS has undergone a revaluation assessment and found that the market value of Property Phoenix was $3,070,000 and $2,240,000 respectively as at 31 December 2021 and 2022. The market value of Property Dragon was $2,500,000 and $1,800,000 respectively as at 31 December 2021 and 2022. On 30 June 2023, CS sold Property Phoenix for $5,000,000. On 31 December 2023, CS started to use Property Dragon as its head office. The market value of Property Dragon on 31 December 2023 was $1,650,000. CS provides depreciation for its owner-occupied properties on a monthly basis using straight-line method and revalues the properties annually in accordance with HKAS 16 Property, Plant and Equipment. Revaluation gain accumulated in revaluation reserve is transferred directly to retained profits when the property is used or disposed of. CS applies the fair value model of accounting for investment properties in accordance with HKAS 40 Investment Property. Required: Prepare journal entries to record the above transactions for the years ended 31 December 2021, 2022 and 2023. Chi Shing Limited ("CS") has acquired two properties and details are as follows: Date of acquisition Cost Useful life Purpose of usage Property Phoenix Property Dragon 1 January 2021 1 July 2021 $3,000,000 $2,000,000 30 years 10 years Head office Rented out to a third party CS has undergone a revaluation assessment and found that the market value of Property Phoenix was $3,070,000 and $2,240,000 respectively as at 31 December 2021 and 2022. The market value of Property Dragon was $2,500,000 and $1,800,000 respectively as at 31 December 2021 and 2022. On 30 June 2023, CS sold Property Phoenix for $5,000,000. On 31 December 2023, CS started to use Property Dragon as its head office. The market value of Property Dragon on 31 December 2023 was $1,650,000. CS provides depreciation for its owner-occupied properties on a monthly basis using straight-line method and revalues the properties annually in accordance with HKAS 16 Property, Plant and Equipment. Revaluation gain accumulated in revaluation reserve is transferred directly to retained profits when the property is used or disposed of. CS applies the fair value model of accounting for investment properties in accordance with HKAS 40 Investment Property. Required: Prepare journal entries to record the above transactions for the years ended 31 December 2021, 2022 and 2023.

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Here are the journal entries to record the transactions for Chi Shing Limited CS for the years ended ... View the full answer