The financial statements for Sotherby Ltd at 30 June 2022, presented a building with a cost...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The financial statements for Sotherby Ltd at 30 June 2022, presented a building with a cost of $495,000 (GST Inclusive) and accumulated depreciation amounting to $220,000. The entity has adopted the straight line method of accounting for depreciation on the building. When initially purchased, management determined the building would have a useful life of 40 years and a residual value of $50,000. On 1 January 2025, Sotherby Ltd completed structural improvements and internal renovations amounting to $143,000 (GST Inclusive), both increasing the productive capacity and the remaining useful life of the building for 30 more years. There is no change to the residual value. Required a. Calculate the number of years the building had been depreciated to 30 June 2022. b. Prepare the journal entry/ies to record the cost of the structural improvements and renovations on 1 January 2025. c. Prepare the general journal entry to record the building's depreciation expense for the year ended 30 June 2025. Note to students: Remember to remove GST from the transactions. Please include commas in your amounts. Please round dollar amounts for the journal entries to the nearest whole dollar. For the journal entries you need to complete in parts (b) and (c) of this question, please copy and paste the relevant account name from Table 1 below. Note: you will not need to use all of the account names listed in Table 1. Table 1- Account names Cash at bank GST receivable Building Accumulated depreciation - building Depreciation expense - building GST payable Structural improvements expense (a) Number of years the building had been depreciated to 30 June 2022 = ?????? years (b) For this workings section, put the minus amounts for accumulated depreciation in brackets (), e.g. (20,000) Workings: Amount ($): Cost of building: Less: Accumulated depreciation 30/6/2022 Less: Accumulated depreciation 30/6/2023 Less: Accumulated depreciation 30/6/2024 Less: Accumulated depreciation 31/12/2024 Equals: Carrying amount Add: Improvements New asset cost Journal entries on 1 January 2025: Particulars Dr. ??? Cr. ??? (To record depreciation for 6 months) Dr. ??? Cr. ??? (To write back accumulated depreciation) Dr. ??? Dr. ??? Cr. ??? (To record structural improvements to building) ???? ??? ??? ??? ??? ??? ??? ??? Debit ($) ??? ??? ??? ??? Credit ($) ??? ??? ??? The financial statements for Sotherby Ltd at 30 June 2022, presented a building with a cost of $495,000 (GST Inclusive) and accumulated depreciation amounting to $220,000. The entity has adopted the straight line method of accounting for depreciation on the building. When initially purchased, management determined the building would have a useful life of 40 years and a residual value of $50,000. On 1 January 2025, Sotherby Ltd completed structural improvements and internal renovations amounting to $143,000 (GST Inclusive), both increasing the productive capacity and the remaining useful life of the building for 30 more years. There is no change to the residual value. Required a. Calculate the number of years the building had been depreciated to 30 June 2022. b. Prepare the journal entry/ies to record the cost of the structural improvements and renovations on 1 January 2025. c. Prepare the general journal entry to record the building's depreciation expense for the year ended 30 June 2025. Note to students: Remember to remove GST from the transactions. Please include commas in your amounts. Please round dollar amounts for the journal entries to the nearest whole dollar. For the journal entries you need to complete in parts (b) and (c) of this question, please copy and paste the relevant account name from Table 1 below. Note: you will not need to use all of the account names listed in Table 1. Table 1- Account names Cash at bank GST receivable Building Accumulated depreciation - building Depreciation expense - building GST payable Structural improvements expense (a) Number of years the building had been depreciated to 30 June 2022 = ?????? years (b) For this workings section, put the minus amounts for accumulated depreciation in brackets (), e.g. (20,000) Workings: Amount ($): Cost of building: Less: Accumulated depreciation 30/6/2022 Less: Accumulated depreciation 30/6/2023 Less: Accumulated depreciation 30/6/2024 Less: Accumulated depreciation 31/12/2024 Equals: Carrying amount Add: Improvements New asset cost Journal entries on 1 January 2025: Particulars Dr. ??? Cr. ??? (To record depreciation for 6 months) Dr. ??? Cr. ??? (To write back accumulated depreciation) Dr. ??? Dr. ??? Cr. ??? (To record structural improvements to building) ???? ??? ??? ??? ??? ??? ??? ??? Debit ($) ??? ??? ??? ??? Credit ($) ??? ??? ???
Expert Answer:
Answer rating: 100% (QA)
Answer Note Deduct GST from transactions Purchase of building 495 000 GST 45 000 450000 Improvements ... View the full answer
Related Book For
Posted Date:
Students also viewed these finance questions
-
Match the following CSBs Question 4 options: but you must still report this income until the bond matures or you cash it in. report the amount shown on the T5 slips. until you cash it in. 1. Interest...
-
Anders invested money in a GIC that pays interest compounded annually. The value, y, of his investment, in dollars, can be modelled by the exponential function y = 5000(1.02) * where x is the time,...
-
Gelato Corporation, a private entity reporting under ASPE, was incorporated on January 3, 2013. The corporation's financial statements for its first year of operations were not examined by a public...
-
Refer to Figure 14.3. Select a year when the gallons of oil spilled were over 15 million. Research the spill(s) for that year. Was the amount due to one oil spill or multiple oil spills?Investigate...
-
Hendi Company has these comparative balance sheet data: Additional information for 2012:1. Net income was $25,000.2. Sales on account were $375,000. Sales returns and allowances amounted to...
-
Bob Downe is auditing Red Gum Home Furniture (RGHF), a manufacturer and retailer of boutique home furniture. RGHF was founded 25 years ago by a husband and wife team and has grown rapidly in the last...
-
The stochastic process \(S_{t}\) is a GBM with drift coefficient 2 and volatility coefficient 3. Write the stochastic differential equation for the process = Y (St 10) e-2t_
-
Disclosures, Conditional and Contingent Liabilities Presented below are three independent situations. Situation 1 A company offers a one-year warranty for the product that it manufactures. A history...
-
Your firm is the external auditor for Southpoint Engineering, a publicly listed company with annual sales of $100 million. The company's head office site houses the manufacturing unit, accounting...
-
Most businesses sell several products at varying prices. The products often have different unit variable costs. Thus, the total profit and the breakeven point depend on the proportions in which the...
-
Load Balancers are appropriate for which purposes? Select all that apply. Off-loading overhead of protocols like TLS Implementing Application Logic code that is hard to implement on Backends...
-
At the beginning of June, you had 15 units on the assembly line. At the end of June, there were 16 units on the assembly line. During the month, you completed 50 units. How many equivalent completed...
-
The record height of a man to date is 8 feet 11 inches ( 107 inches). If all men had identical body types, their weights would vary directly as the cube of their heights. Assume that all men do have...
-
The below graph contains a system curve and the performance curve for a single pump. Use this curve to: a) Sketch the resulting performance curve for two of these identical pumps in series b) Sketch...
-
An order for a 148 lb patient is for 0.03 g/kg/hour for 2 hours bid. The medication is delivered in a 650 mg mixed in 250 ml bag of NSS. The setup is 10 gtt/mL. What is the flow rate in gtt/min?
-
What is the Risk Adjusted Return on Capital (RAROC)? Should the loan be approved according to this model? What is the Moody's KMV Model Return? What is the Moody's KMV Model Risk? What is the...
-
Analytical procedures are often performed on accounting ratios. Discuss the usefulness of analytical procedures applied at the final review stage of an audit.
-
To balance the chemical equation SiH3 + O2 SiO2 + HO, you could introduce coefficients a, b, c, d and write aSiH3 + bO2 cSiO + dHO then write linear equations for each element. The equation for Si...
-
Portofino Company made purchases on account from three foreign suppliers on December 15, 2009, with payment made on January 15, 2010. Information related to these purchases is as follows: Portofino...
-
Which of the following items is normally translated the same way under both the current rate and temporal methods of translation? a. Inventory b. Equipment c. Sales revenue d. Depreciation expense
-
Market-based transfer prices lead to optimal decisions in which of the following situations? a. When interdependencies between the related parties are minimal. b. When there is no advantage or...
-
Salen Company finances some of its current operations by assigning accounts receivable to a finance company. On July 1, 2015, it assigned, under guarantee, specific accounts amounting to 150,000,000....
-
Presented below is information related to the Accounts Receivable accounts of Gulistan Inc. during the current year 2015. 1. An aging schedule of the accounts receivable as of December 31, 2015, is...
-
Bill Jovi is reviewing the cash accounting for Nottleman, Inc., a local mailing service. Jovis review will focus on the petty cash account and the bank reconciliation for the month ended May 31,...
Practical Computer Analysis Of Switch Mode Power Supplies 1st Edition - ISBN: 0824753879 - Free Book
Study smarter with the SolutionInn App