Question

Scoop is a main "crew" in Bob the Builder and it was purchased on January 1,...

Scoop is a main "crew" in Bob the Builder and it was purchased on January 1, Year 10 for $100,000. [Please use "equipment" account for "Scoop" in your journal entry.] Bob has been depreciating Scoop on a straight-line basis over a 25-year period with zero residual value. The appraisal carried out on December, Year 14 determined that the fair value of scoop was $76,000 and the appraisal carried out on December, Year 19 determined that the fair value of scoop was $68,400. Bob adopts revaluation model for Scoop and he uses proportional method. Please note that Bob makes the revaluation-related journal entry after he records depreciation expense as in your lecture note example. Also note that Bob does not adopt any partial-year depreciation. Have fun!

(1) Prepare the journal entry that reflects the revaluation on December, Year 13.

(2) Prepare the journal entry that reflects the revaluation on December, Year 17.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Bob the Builder purchased a land and building in Year 6 for $4,000,000. $1.6 million of...
Bob the Builder purchased a land and building in Year 6 for $4,000,000. $1.6 million of the purchase price was allocated to the land, and the balance to the building. At the time of the purchase it was estimated that the building would have a useful life of 40 years but no residual value. In Year 18 Bob exchanged the land and building for a piece of undeveloped land. The fair market value of the assets given up was estimated...
Year 6 is the first year of operation for Bob the Builder. The following information is...
Year 6 is the first year of operation for Bob the Builder. The following information is available for Bob's inventories:       December 31, Year 6:       At cost:  $585,000;       At lower of cost and net realizable value (NRV): $525,000       December 31, Year 7:       At cost: $780,000;       At lower of cost and net realizable value (NRV): $740,000 Prepare Bob's Year 7 journal entry to adjust its inventory from cost to the lower of cost and NRV, assuming the allowance method is being used.
Year 6 is the first year of operation for Bob the Builder. The following information is...
Year 6 is the first year of operation for Bob the Builder. The following information is available for Bob's inventories:       December 31, Year 6:       At cost:  $585,000;       At lower of cost and net realizable value (NRV): $525,000       December 31, Year 7:       At cost: $780,000;       At lower of cost and net realizable value (NRV): $740,000 Prepare Bob's Year 7 journal entry to adjust its inventory from cost to the lower of cost and NRV, assuming the allowance method is being used.
Bob the Builder purchases an equipment, which will last 17 years with no residual value on...
Bob the Builder purchases an equipment, which will last 17 years with no residual value on August 1, Year 7. The company issues an $800,000, four-year, non-interest-bearing note for the equipment when the prevailing market interest rate for notes of this nature is 8%. The company will pay off the note in four $200,000 installments on each July 31, starting July 31, Year 8. The company adopts mid-month convention for depreciation and depreciation expense is recognized once at the end...
Q2. Bob the Builder purchases an equipment, which will last 17 years with no residual value...
Q2. Bob the Builder purchases an equipment, which will last 17 years with no residual value on August 1, Year 7. The company issues an $800,000, four-year, non-interest-bearing note for the equipment when the prevailing market interest rate for notes of this nature is 8%. The company will pay off the note in four $200,000 installments on each July 31, starting July 31, Year 8. The company adopts mid-month convention for depreciation and depreciation expense is recognized once at the...
Problem Two: Ignore GST. Assume annual accounting periods ending on June 30. On January 1, 2014,...
Problem Two: Ignore GST. Assume annual accounting periods ending on June 30. On January 1, 2014, Malkin Ltd bought a building for $3,000,000; its useful life was 30 years, its residual value nil, and the straight-line method would be used for depreciation. The cost model was adopted. On June 30, 2016, Malkin Ltd decided to adopt the revaluation model for its building. Required: Calculate the book values of the building on June 30, 2014, June 30, 2015, and June 30,...
A property was purchased at a cost of $10m on 1 January 2017. It has a...
A property was purchased at a cost of $10m on 1 January 2017. It has a useful life of 10 years with straight-line depreciation and no residual value. At 1 January 2018, the property was revalued to $12m and its useful life remains unchanged. Prepare the journal entry to account for this revaluation. At 1 January 2019, the property was revalued to $6m and its useful life remains unchanged. Prepare the journal entry to account for this revaluation. At 1...
On January 1, 2018, Iron Limited purchased a piece of equipment for production of goods. The...
On January 1, 2018, Iron Limited purchased a piece of equipment for production of goods. The purchase price of the equipment was $670,000. Iron Limited paid on the date of purchase by the issue of ordinary shares. Iron Limited estimated that the equipment has an expected useful life of 4 years with a residual value of $30,000 on December 31, 2021. On February 15, 2020, Iron Limited disposed of equipment for cash amount of $358,000. Iron Limited adopts revaluation model...
Builders Ltd purchased a block of land on 1 January 2018 for $50,000. On 1 January...
Builders Ltd purchased a block of land on 1 January 2018 for $50,000. On 1 January 2019, Builders Ltd hire an independent valuer to conduct the revaluation of land. The valuer assessed the value of land to its fair value at $100,000. The land was revalued again on 1 January 2020 and due to the COVID-19 pandemic environment the fair value of land decreased to $80,000. Note: Ignore income tax effect. Required: Prepare the journal entries required to record the...
Exercise 22-11 Pina Co. purchased a equipment on January 1, 2015, for $577,500. At that time,...
Exercise 22-11 Pina Co. purchased a equipment on January 1, 2015, for $577,500. At that time, it was estimated that the equipment would have a 10-year life and no salvage value. On December 31, 2018, the firm’s accountant found that the entry for depreciation expense had been omitted in 2016. In addition, management has informed the accountant that the company plans to switch to straight-line depreciation, starting with the year 2018. At present, the company uses the sum-of-the-years’-digits method for...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT