nt to France for $146,000. The plant had cost Belgium $104,000 on 1 January 2018 and had been depreciated straight line over ten years with no scrap value. France used the same depreciation estimates but based their depreciation amounts on the transfer sale price. Both companies use the cost model. Requirements:
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Belgium Ltd is the parent of France Ltd. On 1 January 2020 Belgium sold a plant to France for $146,000. The plant had cost Belgium $104,000 on 1 January 2018 and had been
Requirements:
- Provide all the consolidation elimination entries for 31 December 2021 in respect of the plant in next part of this question.
- Compute the 'unrealised' profit for the plant transaction at 31 December 2021 and enter the amount in the answer space below.
- Provide all your workings or journals in the answer space below.
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- In singapore pinku Ltd sold a machine in the year ended 30 September 2023 for $23,000. This machine was purchased for S$60,000 in the year ended 30 September 2021 and it was depreciated over 5 years though CA was claimed under S19(1) over 3 years. What is the balancing adjustment for the above sale? A. Balancing Charge of $3,000B. Balancing Charge of $13,000C. BalancingAllowanceof$3,000 D. Balancing Allowance of $13,000On January 1, 2020, CDO Corporation determined to sell a group of assets within its shoe manufacturing division, as it believed it was cheaper to buy the parts from China. The assets that it wanted to sell had the following carrying amounts: Factory P22,000,000 Accumulated depreciation. Raw materials (12.000.000) 3.800,000 2.200,000 The management of CDO calculated the fair value less costs to sell of the disposal group to be P14.400,000 Spare parts The assets were sold on February 15, 2020 for P15.400,000, with selling costs amountinit to P700.000 The following balances have been excerpted from Tito Piccolo's statement of financial position: December 31 January 1 Prepaid Insurance 6,000 P 7,500. Interest Receivable Salaries Payable 3,700 61.500 53,000 14.500 Accounts Receivable 550.000 415,000 25,000 Allowance for bad debts i 40,000 Tito Piccolo Company reported the following during 2020 the following items: Insurance premiums paid 41,500 Interest collected 123.500 Salaries paid Sales…Panama Company acquired 60 % of Samoa Corporation on 1/2018. Fair values of Samoa's assets and liabilities approximated book values on that date. Panama uses the initial value method to account for its investment in Samoa. only answer D.) E.) F.) On 1/2019, Panama bought equipment from Samoa for $60,000 that had originally cost Samoa $120,000 and had $ 90,000 of Accumulated depreciation at the time. The equipment had a five-year remaining life and was being depreciated using the straight line method. You are preparing the worksheet for the 2020 fiscal year. a. Was this equipment sale upstream or downstream?b. How much unrealized net gain from the equipment transfer remains at the beginning of 2020? (this is the amount you will need for the *TA entry at 1/2020.)c. Which company's Retained earnings account will be adjusted in the *TA entry in part a? (Which company was the “initiator” of the transaction?)d. How much excess depreciation will there be in each of the first five years after…
- Bomarks acquires an equipment from a foreign supplier on credit for $6 million on 31 March 2022, when the exchange rate was $1 = GH¢ 5. The entity incurred other direct costs of GH¢1.5 million in installing the equipment. The estimated useful life of the equipment is 10 years and the entity has obligation to restore the location to its original state after usage. The estimated cost of dismantling and restoration in 10 years is GH¢3.5 million and the entity’s cost of capital is 8%. Although the equipment was available for use from 1 May 2022, the entity did not bring it into use until 1 July, 2022. Bomarks also sold goods to a foreign customer for $3.5 million on 30 April 2022, when the exchange rate was $1 = GH¢5.75. The customer paid $1 million on 1 July when the rates were $1 = GH¢5.60. On that date, Bomarks paid half of the amount owed for the equipment. At the entity’s year-end of 31 December 2022, the closing exchange rate was $1 = GH¢5.9. The entity’s functional currency is the…Llungby AB spent 1,000,000 krone in 2020 on the development of a new product. The company determined that 25 percent of this amount was incurred after the criteria in IAS 36 for capitalization as an intangible asset had been met. The newly developed product is brought to market in January 2021 and is expected to generate sales revenue for five years. Assume that Llungby AB is a foreign company using IFRS and is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes. Required: Prepare journal entries for development costs for the years ending December 31, 2020, and December 31, 2021, under (1) IFRS and (2) U.S. GAAP. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020, and December 31, 2021, conversion worksheets to convert IFRS balances to U.S. GAAP.MacPro Property Bhd acquired an investment property on 1 January 2015 and measured it using the cost model. On 1 January 2018, MacPro Property Bhd changed the accounting policy and used the fair value model to measure investment property. The acquisition cost of the property was RM70 million and the estimated useful life was 35 years. The fair values of the property were measured as below: Date RM (in million) 31/12/2015 72 31/12/2016 74 31/12/2017 78 31/12/2018 83 Profit after depreciation on investment property but before tax for 2017 and 2018 were RM80 million and RM95 million, respectively. Retained earnings brought forward on 1 January 2017 and 2018, were RM150 million and RM210 million, respectively. Assume that tax rate for 2017 and 2018 was 25%. REQUIRED: Discuss the accounting treatment of the above transaction in accordance to MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors. Prepare the comparative…
- Llungby AB spent 1,000,000 krone in 2020 on the development of a new product. The company determined that 25 percent of this amount was incurred after the criteria in IAS 36 for capitalization as an intangible asset had been met. The newly developed product is brought to market in January 2021 and is expected to generate sales revenue for five years. Assume that Llungby AB is a foreign company using IFRS and is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes. Required: a. Prepare journal entries for development costs for the years ending December 31, 2020, and December 31, 2021, under (1) IFRS and (2) U.S. GAAP. b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020, and December 31, 2021, conversion worksheets to convert IFRS balances to U.S. GAAP. Required A Required B Prepare journal entries for development costs for the years ending December 31, 2020,…GEE Company and EYCH Inc. decided to exchange machineries on January 1, 2019. The machine of GEE (Machine G) was purchased in January 1, 2016 for ₱1,000,000. The estimated useful life of the machine is 10 years, with no residual value. On the date of the exchange, Machine G’s fair value is ₱680,000. EYCH’s machine (Machine H) was purchased on January 1, 2018, for ₱2,500,000. The estimated useful life of the machine is 5 years, with no residual value. The fair value of Machine H on the date of exchange is ₱2,100,000. Because of the difference in the fair values, included in the agreement is a stipulation wherein GEE shall pay ₱1,500,000. The exchange is considered to be with commercial substance. How much is the gain(loss) from exchange that should be recognized by GEE Company? A. ₱ 80,000 - GAIN B. ₱ 20,000 - GAIN C. ₱ 1,500,000 - L0SS D. ₱ 20,000 - LOSS with solutionAssume there are three separate real estate companies: US Realty (which applies the cost model with straight-line depreciation), UK Realty (which applies the revaluation model), and Singapore Realty (which applies the fair value model). Assume that on January 1, 2020, each company pays $1,000 to obtain an investment property, comprised of the land of negligible value and a building worth $1,200 (fair value). The building has a 10-year useful life, no residual value, and the fair value of the property is close to its value-in-use. If the companies want to sell the property, the transaction cost is negligible. (Hint: Use the account ``Fair Value Gain/Loss on Investment Property’’ when applying the fair value model.) Instructions Prepare the journal entries for the following events and transactions. (1) Acquisition on January 1, 2020 (2) Fair value of the building is $1,300 on December 31, 2020 (3) Fair value of the building is $1,100 million on December 31, 2021 (4) Fair value of the…
- On January 01, 2020, Sisig Corp. acquired an investment property, and the initial cost of the investment property was P5,000,000. On the acquisition date, the company chooses the cost model to account for its investment. As of December 31, 2020, it has a carrying value of P4,900,000 and a fair value of P5,100,000.On December 31, 2021, the company decided to transfer the investment property to owner-occupied property that is also under the cost model. On the date of transfer, the fair value of the property is P5,000,000 while its carrying value was P4,800,000. What amount of gain or loss on transfer should the company recognize on December 31, 2021? a. P300,000 loss b. P200,000 loss c. No gain or loss d. P100,000 lossAssume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes for given problem. Llungby AB spent 1,000,000 krone in 2017 on the development of a new product. The company determined that 25 percent of this amount was incurred after the criteria in IAS 36 for capitalization as an intangible asset had been met. The newly developed product is brought to market in January 2018 and is expected to generate sales revenue for five years.a. Determine the appropriate accounting for development costs for the years ending December 31, 2017, and December 31, 2018, under (1) IFRS and (2) U.S. GAAP. b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2017, and December 31, 2018, conversion worksheets to convert IFRS balances to U.S. GAAP.Lex plc. is a manufacturer located in the Midlands operating in the textiles industry. The company decided to revalue its buildings on 1 January 2019 to their market value. On 1 January 2019, prior to the revaluation exercise, the carrying amount of buildings corresponded to their original cost of £4m less accumulated depreciation of £0.4m. The fair value of buildings at the date of revaluation was confirmed to be £4.5m with an estimated remaining life of 18 years at that date. As at 31 December 2020, due to the economic impact of the COVID-19 pandemic, the fair value of Lex plc.'s buildings decreased to £3m. No depreciation has yet been charged on non-current assets for the years ended 31 December 2019 and 31 December 2020. Lex opted to transfer any balances in the revaluation surplus account to retained earnings only when the asset is derecognised. Required: Explain the accounting treatment for the transactions above for the years ended 31 December 2019 and 31 December 2020. In your…
