Parnell Company acquired construction equipment on January 1, 2020, at a cost of $76,300. The equipment...

 

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Parnell Company acquired construction equipment on January 1, 2020, at a cost of $76,300. The equipment was expected to have a useful life of four years and a residual value of $13.000 and is being depreciated on a straight-line basis. On January 1, 2021, the equipment was appraised and determined to have a fair value of $71,800, a salvage value of $13,000, and a remaining useful life of three years. In measuring property, plant, and equipment subsequent to acquisition under IFRS, Parnell would opt to use the revaluation model in IAS 16. Assume that Parnell Company is a U.S.-based company that is Issuing securities to foreign Investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore Income taxes. Required: a. Prepare Journal entries for this equipment for the years ending December 31, 2020, and December 31, 2021, under (1) U.S. GAAP and (2) IFRS. b. Prepare the entry(les) that Parnell would make on the December 31, 2021, conversion worksheet to convert U.S. GAAP balances to IFRS. Complete this question by entering your answers in the tabs below. Required A Required B Prepare journal entries for this equipment for the years ending December 31, 2020, and December 31, 2021, under (1) U.S. GAAP and (2) IFRS. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 2 3 4 5 Date 01/01/2020 12/31/2020 12/31/2020 01/01/2021 12/31/2021 Equipment Cash Depreciation expense Equipment Answer is not complete. Equipment Depreciation expense Accumulated depreciation-Equipment Revaluation surplus General Journal Depreciation expense Accumulated depreciation Equipment 33 *Ⓡ ✔ X ›› (* (3 Debit 76,300 15.825 15,825 Ⓒ 11,325 19,600 Credit 76,300✔ 15,825 15,825 11,325 19,600 Required A Prepare the entry (ies) that Parnell would make on the December 31, 2021, conversion worksheet to convert U.S. GAAP balances to IFRS. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Credit No 1 Required B 2 Date 12/31/2021 12/31/2021 Equipment Revaluation surplus Account Title Depreciation expense Accumulated depreciation-Equipment < Required A x Required B > Debit 7,550 X 3,775 7,550 X 3,775 Parnell Company acquired construction equipment on January 1, 2020, at a cost of $76,300. The equipment was expected to have a useful life of four years and a residual value of $13.000 and is being depreciated on a straight-line basis. On January 1, 2021, the equipment was appraised and determined to have a fair value of $71,800, a salvage value of $13,000, and a remaining useful life of three years. In measuring property, plant, and equipment subsequent to acquisition under IFRS, Parnell would opt to use the revaluation model in IAS 16. Assume that Parnell Company is a U.S.-based company that is Issuing securities to foreign Investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore Income taxes. Required: a. Prepare Journal entries for this equipment for the years ending December 31, 2020, and December 31, 2021, under (1) U.S. GAAP and (2) IFRS. b. Prepare the entry(les) that Parnell would make on the December 31, 2021, conversion worksheet to convert U.S. GAAP balances to IFRS. Complete this question by entering your answers in the tabs below. Required A Required B Prepare journal entries for this equipment for the years ending December 31, 2020, and December 31, 2021, under (1) U.S. GAAP and (2) IFRS. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 2 3 4 5 Date 01/01/2020 12/31/2020 12/31/2020 01/01/2021 12/31/2021 Equipment Cash Depreciation expense Equipment Answer is not complete. Equipment Depreciation expense Accumulated depreciation-Equipment Revaluation surplus General Journal Depreciation expense Accumulated depreciation Equipment 33 *Ⓡ ✔ X ›› (* (3 Debit 76,300 15.825 15,825 Ⓒ 11,325 19,600 Credit 76,300✔ 15,825 15,825 11,325 19,600 Required A Prepare the entry (ies) that Parnell would make on the December 31, 2021, conversion worksheet to convert U.S. GAAP balances to IFRS. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Credit No 1 Required B 2 Date 12/31/2021 12/31/2021 Equipment Revaluation surplus Account Title Depreciation expense Accumulated depreciation-Equipment < Required A x Required B > Debit 7,550 X 3,775 7,550 X 3,775

Answer rating: 100% (QA)

a Journal Entries under US GAAP and IFRS 1 Under US GAAP On January 1 2020 No specific entry require... View the full answer