Webb Corporation prepares financial statements in accordance with IFRS. Selected accounts included in the property, plant, and equipment section of the company’s statement of financial position at December 31, 2019, had the following balances:
Land .............................................. $ 300,000
Land Improvements ...................... 140,000
Buildings ...................................... 1,100,000
Equipment ...................................... 960,000

During 2020, the following transactions occurred:

1. A tract of land was acquired for $150,000 as a potential future building site.

2. A plant facility consisting of land and a building was acquired from Knorman Corp. for use in production in exchange for 20,000 of Webb’s common shares. The most recent sale of Webb’s common shares took place one month earlier, when 4,000 of Webb’s common shares sold for $57 per share. The plant facility was carried on Knorman’s books at $110,000 for land and $320,000 for the building at the exchange date. At the exchange date, a reliable, independent valuator determined the fair value of the land and building to be $230,000 and $690,000, respectively.

3. Equipment was purchased for a total cost of $400,000. Additional costs incurred were as follows:

Freight and unloading ............................ $13,000
Provincial sales taxes ................................ 28,000
GST (recoverable) ...................................... 20,000
Installation ................................................. 26,000

4. Expenditures totalling $95,000 were made for new parking lots, streets, and sidewalks at the corporation’s various plant locations. These expenditures had an estimated useful life of 15 years.

5. A piece of equipment that cost $80,000 on January 1, 2012, was scrapped on June 30, 2020. Doubledeclining- balance depreciation had been recorded based on a 10-year life. Round depreciation calculations to the nearest dollar.

6. A piece of equipment was sold for $20,000 on July 1, 2020. Its original cost was $44,000 on January 1, 2017, and it was depreciated on the straight-line basis over an estimated useful life of seven years, assuming a residual value of $2,000.

Instructions

a. Prepare a detailed analysis of the changes in each of the following statement of financial position accounts for 2020: Land, Land Improvements, Buildings, and Equipment. Ignore the related accumulated depreciation accounts.

b. List the items in the transactions above that were not used to determine the answer to part (a), and show the relevant amounts and supporting calculations in good form for each item. In addition, indicate where, or if, these items should be included in Webb’s financial statements.

c. Digging Deeper How will the land in item 1 be accounted for when it is used as a building site?