BE $716$

Subsequent changes in fair value; disposal; property, plant, and equipment

LO$76$

Koh Brothers Limited acquired a factory for $$54$ million on June $30,2023,$ to produce hospital machines and equipment. The company estimated the factory has a useful life of $25$ years with $$2$ million in residual value at the end of its useful life. The company adopted a straight$-$line depreciation method for all its property, plant, and equipment. The factory$$s market value appreciated steadily to $$60$ million at the end of the company$$s financial year, December $31,2023.$ On June $30,2024,$ the factory was sold for cash at $$59$ million. Show the journal entries if Koh Brothers Limited account for the factory using $($a$)$ the cost method, and $($b$)$ the revaluation method.

BE $717$

Subsequent changes in fair value; disposal; investment property

LO$76$

Refer to the situation described in BE $716.$ Assume that Koh Brothers Limited rented out the factory to another unrelated party. Show the journal entries if the company account for the factory using the fair value method.

BE $718$

Subsequent changes in use of property

LO$76$

Refer to the situation described in BE $716.$ Assume that Koh Brothers Limited accounted for the factory using the cost method after initial recognition and that on June $30,2024,$ the factory was rented out to another unrelated party. The market value of the factory was $$59$ million on June $30,2024.$ The company used the fair value method to account for all investment property. Show the journal entries to record the change in use of the factory.