Question

XYZ Company purchased a land for $ 1,000,000 during 2017 and chooses the revaluation model in...

XYZ Company purchased a land for $ 1,000,000 during 2017 and chooses the revaluation model in accounting for its land.  

Below are the following information:

Date

Fair Value

December 31, 2017

$ 1,120,000

December 31, 2018

$ 870,000

December 31, 2019

$ 1,110,000

a. How much is the recovery of impairment loss and revaluation gain on land for the year 2019? _____

b. What is the amount of unrealized gain on revaluation - land for the year 2019? ____

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

a)

Fair value of land as on December 31, 2018 = 870000

Fair value of land as on December 31, 2019 = 1110000

Total increment in the value of land for the year 2019 =

Fair value of land as on December 31, 2019 - Fair value of land as on December 31, 2018

= 1110000 – 870000 = 240000

Recovery of impairment loss = Purchase price of land – Carrying value of land in the books

= 1000000 – 870000 = 130000

Revaluation gain on land for the year 2019 =

Fair value of land as on December 31, 2019 - Purchase price of land

= 1110000 – 1000000 = 110000

b)

Amount of unrealized gain on revaluation land for the year 2019 =

Fair value of land as on December 31, 2019 - Carrying value of land in the books at the end of 2018

= 1110000 – 870000 = 240000

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
XYZ Company purchased a land for $ 1,000,000 during 2017 and chooses the revaluation model in...
XYZ Company purchased a land for $ 1,000,000 during 2017 and chooses the revaluation model in accounting for its land.   Below are the following information: Date Fair Value December 31, 2017 $ 1,120,000 December 31, 2018 $ 870,000 December 31, 2019 $ 1,110,000 A ) What is the amount of unrealized gain on revaluation - land for the year 2018? ____ B ) How much is the accumulated other comprehensive income for the year 2018 to be recognized in the...
During 2017, Blue Design purchased a number of investments in equity securities for liquidity management. The...
During 2017, Blue Design purchased a number of investments in equity securities for liquidity management. The investments are minority passive, and described below: Trading Security Fair Value – 12/31/2018 Fair Value – 12/31/2017 Cost ABC Equity $123,000 $99,000 $65,000 XYZ Equity $98,000 $178,000 $58,000 ABC posted earnings of $22,000 and XYZ posted earnings of $28,000. These investments were not sold during the year. What is the total for the net unrealized gain/loss shown on the income statement in 2018 for...
DEF Company uses the asset adjustment (elimination) revaluation model to account for its machinery. Machinery that...
DEF Company uses the asset adjustment (elimination) revaluation model to account for its machinery. Machinery that cost $80000 had a net book value of $65000 on January 1, 2019. On this date the machine had an estimated residual value of $5000 and a remaining useful life of 15 years. At December 31, 2019 the machinery’s fair market value is $63000. This is the first year DEF is applying the revaluation model. Required: Prepare the journal entries to record the machinery...
On January 1, 2017, Choco Corp. purchased an asset for P1,000,000 with an estimated useful life...
On January 1, 2017, Choco Corp. purchased an asset for P1,000,000 with an estimated useful life of 10 years. Straight-line method of depreciation is to be used. On December 31, 2018, it was properly determined that the recoverable amount of the asset is P640,000. On December 31, 2019, it was properly computed that the recoverable amount of the asset is P740,000. 1. Under the cost model for long-lived assets, what are the amounts to be reported in the profit or...
Entity A owns a motor van that was involved in an accident at the year-end of...
Entity A owns a motor van that was involved in an accident at the year-end of 2019. It is barely useable, so the value in use is estimated at $1,500,000. However, the motor van is a common model and there is a demand for its parts. This results in the fair value of $3,600,000 and costs of disposal of $100,000 respectively. On 1 January 2019, the carrying amount of the motor van was $8,000,000 and the van was estimated to...
ABC Ltd purchases equipment for $1,000,000 on January 2, 2019. The equipment has a useful life...
ABC Ltd purchases equipment for $1,000,000 on January 2, 2019. The equipment has a useful life of five years, is depreciated using the straight‐line method of depreciation, and its residual value is zero. ABC chooses the revaluation model for its equipment over the life of equipment. The fair value of equipment at 31 December 2019 (the end of reporting period of ABC Ltd) is $950,000. The fair value of equipment at 31 December 2020 is $570,000. Indicators of impairment were...
Loreal-American Corporation purchased several marketable securities during 2018. At December 31, 2018, the company had the...
Loreal-American Corporation purchased several marketable securities during 2018. At December 31, 2018, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2017, and all are considered securities available-for-sale. Cost Fair Value Unrealized Holding Gain (Loss) Short term: Blair, Inc. $ 504,000 $ 393,000 $ (111,000 ) ANC Corporation 462,000 504,000 42,000 Totals $ 966,000 $ 897,000 $ (69,000 ) Long term: Drake Corporation $ 504,000 $ 572,000 $ 68,000 Aaron...
Assuming No Revaluation: ABC Company owns only one building that it purchased in 2008 at a...
Assuming No Revaluation: ABC Company owns only one building that it purchased in 2008 at a cost of 4,000,000 with an estimated life of 20 years. As of December 31, 2012 the carrying value of the building is $3,000,000. The balance in the Building account is the $4,000,000 historical cost and the accumulated depreciation balance is $1,000,000. On December 31, 2012 after 5 years of depreciation, the company sold the building for $3,700,000.     What is the amount of gain...
Edwards Company contracted on 4/1/17 to construct a building for $4,800,000. The project was completed in...
Edwards Company contracted on 4/1/17 to construct a building for $4,800,000. The project was completed in 2019. Additional data follow: 2017 2018 2019 Costs incurred to date $1,120,000 $2,700,000 $3,800,000 Estimated cost to complete 2,080,000 900,000 — Billings to date 1,000,000 3,800,000 4,800,000 Collections to date 800,000 2,600,000 4,400,000 Instructions (a) Calculate the income recognized by Edwards under the percentage-of-completion method of accounting in each of the years 2017, 2018, and 2019. (b) Prepare all necessary entries for the year...
Pronghorn Corporation, a clothing retailer, had income from operations (before tax) of $405,000, and recorded the...
Pronghorn Corporation, a clothing retailer, had income from operations (before tax) of $405,000, and recorded the following before-tax gains/(losses) for the year ended December 31, 2020: Gain on disposal of equipment 29,160 Unrealized (loss)/gain on FV-NI investments (58,320 ) (Loss)/gain on disposal of building (73,440 ) Gain on disposal of FV-NI investments 35,640 Pronghorn also had the following account balances as at January 1, 2020: Retained earnings $442,800 Accumulated other comprehensive income (this was due to a revaluation surplus on...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT