ACC 206: BCD Pte Ltd (BCD PL) is a Singapore incorporated company and adopts the SFRSs. Its
Question:
ACC 206:
BCD Pte Ltd ("BCD PL") is a Singapore incorporated company and adopts the SFRSs. Its financial year-end is on 31 December.
On 1 January 20X1, BCD PL purchased a building in cash to house its production facilities for $400,000. The building was measured subsequently at depreciated historical cost. The building was assessed as having a useful life of 10 years.
On 1 June 20X1, BCD PL had a change of plan and decided to sell the building.
On 1 July 20X1, BCD PL placed the building with an agent for immediate sale and have started advertising the building at a selling price of $390,000 which was considered to be its fair value. The selling expenses were estimated to be $14,000. The value in use of the building was $375,000.
At 31 December 20X1, the building remained unsold. At that point, the fair value less costs to sell was $375,000 and the value in use of the building was $374,000.
The building was sold on 1 May 20X2 for $400,000 (net of selling costs).
Required:
Illustrate the accounting for this building by BCD PL by preparing the necessary journal entries, with journal narratives, from purchase to disposal under the appropriate SFRS(s).(20 marks)