Snowshoe Winter Inc. (SWI) owns an apartment complex, which it classifies as an investment property. The...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Snowshoe Winter Inc. (SWI) owns an apartment complex, which it classifies as an investment property. The apartment complex was acquired on April 1, 2021 and was initially recognized at its acquisition cost of $8,400,000 which includes the initial purchase price of $8,000,000, $150,000 legal fees to purchase the property, and $250,000 for land transfer fees. SWI determines that 80% of the total value is related to the apartment complex and the remaining value is related to the land. SWI has a November 30 year end. The following fair values are determined at each year end date: November 30, 2021: $8,550,000 November 30, 2022: $8,600,000 November 30, 2023: $8,300,000 SWI expects the apartment complex to have a 40-year life and a residual value of $750,000. The company uses the straight-line method of depreciation. Required (17 marks): a) b) Assuming that SWI applies the cost model prepare all the required journal entries for 2021, 2022 and 2023. (Please date your entries) Assuming that SWI applies the fair value model prepare all the required journal entries for 2021, 2022 and 2023. (Please date your entries) Snowshoe Winter Inc. (SWI) owns an apartment complex, which it classifies as an investment property. The apartment complex was acquired on April 1, 2021 and was initially recognized at its acquisition cost of $8,400,000 which includes the initial purchase price of $8,000,000, $150,000 legal fees to purchase the property, and $250,000 for land transfer fees. SWI determines that 80% of the total value is related to the apartment complex and the remaining value is related to the land. SWI has a November 30 year end. The following fair values are determined at each year end date: November 30, 2021: $8,550,000 November 30, 2022: $8,600,000 November 30, 2023: $8,300,000 SWI expects the apartment complex to have a 40-year life and a residual value of $750,000. The company uses the straight-line method of depreciation. Required (17 marks): a) b) Assuming that SWI applies the cost model prepare all the required journal entries for 2021, 2022 and 2023. (Please date your entries) Assuming that SWI applies the fair value model prepare all the required journal entries for 2021, 2022 and 2023. (Please date your entries)
Expert Answer:
Answer rating: 100% (QA)
a Cost Model Because land is not an accumulated depreciation asset depreciation will only be applied to the complex Depreciable value is assigned to a... View the full answer
Related Book For
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
Posted Date:
Students also viewed these accounting questions
-
Q) The following are the transactions of ABC Ltd. Based on the following transactions prepare journal entries. 2018 April 2 Started business with Rs 1,00,000: paid into Bank Rs. 50,000 3 Bought...
-
Nevine Corporation owns and manages a small 10-store shopping centre, which it classifies as an investment property. Nevine has a May 31 year end and initially recognized the property at its...
-
Nevine Corporation owns and manages a small 10-store shopping centre and classifies the shopping centre as an investment property. Nevine has a May 31 year end and initially recognized the property...
-
5t-6, x <2 2x4 find f '(x) and give its domain. 2x+8, x>4 Given f(x)=x
-
Jones drew a check for $1,000 on The First Bank and mailed it to the payee, Thrift, Inc. Caldwell stole the check from Thrift, Inc., chemically erased the name of the payee, and inserted the name of...
-
What are the elements of the eleven-part brief?
-
Match each of the following sounds with a corresponding decibel level: live outdoor concert, birds chirping, window air conditioner, garbage disposal. 1. \(40 \mathrm{~dB}\) 2. \(60 \mathrm{~dB}\) 3....
-
In the following table, project activities in days are listed with three time estimates for duration in days and predecessors for the activities. (a) Calculate the expected time of each activity...
-
find the velocity of a plane that travels 775 km due north in 4 hours 15 minutes
-
Lawrence is a 16-year-old youth who was found guilty of vandalism and assault. He was convicted of breaking into his school with two friends and writing insulting slogans on the hallway walls. He was...
-
Exercise 1-14B Interpreting information shown in a balance sheet Both balance sheets shown in the following table were dated as of December 31, Year 3: Balance Sheets for Assets Cash Land Total...
-
A large chain amusement park sells tickets at its main gate for guests who are visiting the park for just that one day. The park also sells seasonal passes that can only be used on weekdays. What...
-
1. ethical leadership leader traits 2. ethical leadership leader values Explain briefly,
-
What is the importance of performance management systems? What are some of the strategies that organizations must consider when selecting the best performance management system. Choose three...
-
19. What is the output of following program? public class Test implements Runnable { public void run() { } System.out.printf("GFG "); public static void main(String[] args) throws...
-
(a) Sun Ltd. in planning to import an equipment from Japan at a cost of 3,400 lakh yen. The company may avail loans at 18 per cent per annum with quarterly rests with which it can import the...
-
The __________ approach to executing a movement must also incorporate the forces produced by emotional intensity and musical dynamics and tempo
-
In Exercises find dy/dx by implicit differentiation. xy - y = x
-
Munro Limited reports the following information in its tax files covering the fiveyear period from 2018 to 2022. All assets are Class 10 with a 30% maximum CCA, and no capital assets had been...
-
Global Corporation prepares financial statements in accordance with ASPE. At January 1, 2020, the company had retained earnings of $1,038,000. In 2020, net income was $335,000, and cash dividends of...
-
Assume the facts given in E6.37 except now assume that the construction industry has experienced significant expansion, making construction materials and labour more costly than originally estimated....
-
Three spanning trees of Graph \(K\), which include edges \(m n\) and \(o q\), but do not include no. Use the figure shown to draw three possible spanning trees that fit the given description. b C d e...
-
Graph 18 Use Kruskal's Algorithm to find a minimum spanning tree of the given graph. Graph it and calculate its weight. 9.3 a 1.5 13.3 5.2 8.7 Graph 17 2.0 50' 100 110 250 300 90 75 225 210 425 Graph...
-
The Prepaid Insurance account began the year with a balance of $460. During the year, insurance in the amount of $1,040 was purchased. At the end of the year (December 31), the amount of insurance...
Study smarter with the SolutionInn App