+1-415-670-9189
info@expertsmind.com
Determine the cost of the property to be recorded
Course:- Accounting Basics
Reference No.:- EM131900379




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Accounting Basics

Question - ABC Ltd is in the business of providing management consultation services in Parnell area. ABC bought a property on 1 July 2012 for a cost of $1,500,000. The property consists of land and building. The value of the land is $800,000 at time of purchase. The property is used as offices and seminar rooms. ABC renovates the property in order to make it suitable for its operation. The cost of renovation is $80,000. The renovation is completed in 2 months after the purchase. ABC has a balance date of 30 June.

1. Determine the cost of the property to be recorded in the accounts. (Explain your answer with reference to NZ IAS 16).

2. Assume ABC depreciates the building part of the property on a straight-line basis. Depreciation is $40,000 each year for the building. The company depreciates its PPE to the nearest month. On 1 July 2013, the property is revalued to $1,700,000, of which the land portion appreciated by $100,000. Prepare journal entries to reflect the revaluation for both land and building of the property.

Requirement: You must cite appropriate paragraph number of NZ IAS 16 in your answer.You do not have to copy down the relevant standards, but you need to use your own words to explain how the standards apply in the questions above.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
Amy transfers property with a tax basis of $900 and a fair market value of $600 to a corporation in exchange for stock with a fair market value of $450 in a transaction that
Santana Co. sold merchandise to Birch Co. on account, $6,000, terms 2/15, n/30. The cost of the merchandise sold is $4,000. Santana Co. issued a credit memo for $800 for merch
During 2010, Hopkins purchased $760,000 of raw materials, incurred direct labor costs of $100,000, and incurred manufacturing overhead totaling $128,000. How much is total m
On November 1, 2015, the account balances of Schilling Equipment Repair were as follows. During November, the following summary transactions were completed. Journalize the Nov
Hamilton Company issues $10,000,000, 6%, 5-year bonds dated January 1, 2012 on January 1, 2012. The bonds pay interest semiannually on June 30 and December 31. The bonds are
The table below shows where chemical engineers found employment in 2000, categorized by degree. For each degree category, (BS, MS and PHD) draw a bar chart and a pie chart.
In May 2015, Hernando, a resident of California, has his 2013 Federal income tax return audited by the IRS. An assessment of additional tax is made because he had inadverten
After reading Porter's Five Forces paper, refer back to St. Sebastian and the facts laid out in the background reading and Case #1and consider: What products are in this ind