User Account

All Pages

How much is the carrying amount of the land

Assignment Help Accounting Basics
Reference no: EM131915214

Question - Moon also owns some land, which was purchased at a cost of $5,000,000 on 30 June 2012. After carrying the land at cost, on 30 June 2015 Mood decides to use revaluation model, as the area has strongly increased in market value. After one year, on 30 June 2016, due to a flood, the attractiveness of the area has dropped.

As the accountant of Moon, please support the company in the decisions and accounting of the revaluation of the land on 30 June 2015 and 30 June 2016, using the following information:

Net Selling Price Value in Use Fair Value

30 June 2015 5,200,000 5,300,000 6,000,000

30 June 2016 4,200,000 4,400,000 4,500,000

1) Determine which one among the three values provided is the value to be used on 30 June 2015 and 2016 to carry the land according to revaluation model.

2) After the acquisition in 2012, on 30 June 2014, how much is the carrying amount of the land?

3) Assume that the managers of Moon in 2015 were trying to obtain a relevant loan from ANZ Bank and the Bank was mainly checking on the solvability of the company through the Debt/Assets ratio. Can you critically link the adoption of the revaluation model by the company and this potential loan agreement?

Reference no: EM131915214

Questions Cloud

Write an algebraic expression that represents total income : Write an algebraic expression that represents the total annual income from both investments. Simplify the expression.
Perform cost-benefit analysis : Perform a cost-benefit analysis. Many people who perform a cost-benefit ana- lysis on a regular basis tend to call it “shopping around.
What are the hallmarks of a good business code of conduct : What are the hallmarks of a good business code of conduct? Are conflicts of interest the same as self-dealing
What is the relationship between risk and return : First, what is "risk" in business? How can we measure risk? Next, what is the relationship between risk and return?
How much is the carrying amount of the land : Moon also owns some land, which was purchased at a cost of $5,000,000 on 30 June 2012. How much is the carrying amount of the land
Likely to contribute to capital project analysis failure : Synthesize your one-paragraph position on what 3-5 specific factors you believe most likely to contribute to capital project analysis failure.
How would the purchasing power of your savings have changed : Real rate of interest in 1975 was %. How would the purchasing power of your savings have changed over the year?
What is post merger value of operations : What is the post merger value of operations?
Why do you think heat is frequently used when styling hair : Human hair is composed of a protein, keratin. Considering protein structures, why do you think heat is frequently used when styling hair?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Prepare the journal entries required to create

Spoiled Baby Corp (SPC) sells baby buggies. Recent changes in the law required SPC to warranty its products for 90 days and you must set up the required accounts. Historical Data indicates that 6% of monthly sales result in warranty claims. The Ju..

  How to calculate earnings per share on common stock

There is an unamortized discount on the bonds. Using the book value method, the company would record what increase in paid-in capital in excess of par - Know how to calculate earnings per share on common stock.

  Process for making accurate meter sticks

Assuming that the process was in control during the calibration period, is the company's process for making accurate meter sticks out of control?

  How should you evaluate macgivers annual report in light of

macgiver brass is a brass plating firm with sales of 8 million and profits before taxes of 625000. macgiver has a loan

  What is the equity method balance in investment in lindman

Matthew owns 30 percent of the outstanding stock of Lindman. What is the equity method balance in the Investment in Lindman account at the end of 2015?

  Calculate the amount of the loss recorded on the sale

On January 1, 2018, XYZ Company paid $380,000 to purchase land, building, and equipment. Calculate the amount of the loss recorded on the sale of the equipment

  Problem related to the pipeline

If the air from the end of a pipeline is delivered through 50 ft of 1~-in. hose to a rock drill that requires 120 cfm of air.

  Find the total cost function c

find the total cost function C(q) and the cost of producing 30 units

  Statement of retained earnings for the andrew company

In good form using proper classifications prepare an Income Statement with Earnings per Share Calculated and Statement of Retained Earnings for the Andrew.

  What methods are used to allocate the cost

John recently came into a sum of money from an inheritance and is contemplating purchasing a small manufacturing facility in his home town. Not knowing much about running a business, he decided to have lunch with some of the other businesspeople i..

  Error analysis and correcting entry

The reported net incomes for the first 2 years of US Books Corp. were as follows: 2013, $268,000; and 2014, $412,000. Early in 2015, the following errors were discovered.

  Explain what is meant by high quality of earnings

Explain what is meant by high quality of earnings and evaluate the quality of the company's earnings - Discuss your findings.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd