Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Chan Group uses revaluation accounting for a class of equipment it uses in its Tennis club business. Chan purchased the equipment on January 1, 2019,

image text in transcribedimage text in transcribed

Chan Group uses revaluation accounting for a class of equipment it uses in its Tennis club business. Chan purchased the equipment on January 1, 2019, for $600,000; it has a 10-year useful life with no residual value. Chan Group has the following information related to the equipment. (Assume that Chan uses Straight-line method for depreciation and the estimated useful life and residual value does not change during the periods presented below.) Date Fair Value January 1, 2019 December 31, 2019 December 31, 2020 $600,000 567,000 440,000 460,000 December 31, 2021 5. Prepare the entry to record the Depreciation of equipment & AOCI adjustment, if any, on 12-31-2020 6. Prepare the entry to record the Revaluation of equipment on 12-31-2020 7. Determine the amounts to be reported by Chan Group at December 31, 2020. (Insert a bracket for the expenses, losses or negative balance) WORKINGS 12/31/2020 BALANCE +/(-) Equipment (Impairment Loss) / Recovery of Impairment Loss Other Comprehensive Income - Unrealized Gain/(Loss) on revaluation - equipment (OCI) Accumulated Other Comprehensive Income Chan Group uses revaluation accounting for a class of equipment it uses in its Tennis club business. Chan purchased the equipment on January 1, 2019, for $600,000; it has a 10-year useful life with no residual value. Chan Group has the following information related to the equipment. (Assume that Chan uses Straight-line method for depreciation and the estimated useful life and residual value does not change during the periods presented below.) Date Fair Value January 1, 2019 December 31, 2019 December 31, 2020 $600,000 567,000 440,000 460,000 December 31, 2021 5. Prepare the entry to record the Depreciation of equipment & AOCI adjustment, if any, on 12-31-2020 6. Prepare the entry to record the Revaluation of equipment on 12-31-2020 7. Determine the amounts to be reported by Chan Group at December 31, 2020. (Insert a bracket for the expenses, losses or negative balance) WORKINGS 12/31/2020 BALANCE +/(-) Equipment (Impairment Loss) / Recovery of Impairment Loss Other Comprehensive Income - Unrealized Gain/(Loss) on revaluation - equipment (OCI) Accumulated Other Comprehensive Income

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Development Of Accounting And Auditing Systems In China

Authors: Xu-Dong Ji

1st Edition

0415792886, 978-0415792882

More Books

Students also viewed these Accounting questions