D&D Construction Ltd. is based in Maitland, Nova Scotia. The company takes on construction jobs ranging from small contracts worth just a few thousand dollars to multi-million-dollar projects. It only prepares accrual and adjusting entries at year end. The following two significant transactions have occurred in 20X7, and may have possible yearend adjustment implications:

a) Land

D&D accounts for land using the revaluation model. The company has only one parcel of land. It is recorded in the statement of financial position by D&D at $3.2 million. In 20X7, the value of the land was assessed, and found to be $3 million. No revaluation adjustments have been recorded in the past.

Required:Prepare the journal entry to record the change in value of the land.

b) Plant and equipment

Details of D&D's property, plant, and equipment are provided in the data file. Buildings, mobile equipment, automobiles, and office equipment are depreciated using the straight-line method. Tools and equipment are depreciated using the declining balance method. The depreciation rates on tools and equipment vary from 17.5% to 33% per year. Computer equipment is depreciated using a double-declining rate method at 62.5% per year. On January 1, 20X7, warehouse equipment with a cost of $85,600 was delivered. The equipment was immediately put into service. The useful life is expected to be 11 years, with an expected residual value of $10,500. This equipment is depreciated using the declining balance method at a rate of 17.5%. The invoice for this equipment was received and paid, but was inadvertently not recorded. On December 31, 20X7, the company disposed of several hand tools. The cost of these tools was $21,300, and accumulated depreciation as at December 31, 20X6, was $18,899. The equipment sold for total proceeds of $6,500. The funds received were recorded by the company as a gain on sale of property, plant and equipment of $6,500. Depreciation for 20X7 has not yet been recorded for any of the property, plant, and equipment (PPE) held by the company.

Required:Prepare necessary journal entries to record and correct the PPE transactions detailed above.

A B C D E F G H J K L M N D&D Construction Ltd. A W N Property, plant, and equipment December 31, 20X7 Cost, net of Accumulated revaluation / revaluation / impairments, Accumulated Net book Dep'n impairments ending depreciation value, at Life (in method / to December December 31, Residual to December December 5 Account years) factor Cost, opening 31, 20X6 20X6 value 31, 20X6 31, 20X6 6 Land n/a 3,200,000 3,200,000 3,200,000 7 Workshop A 35 SL 485,650 485,650 45,000 195, 145 290,505 8 Warehouse (building) 40 SL 209,520 209,520 20,000 73,439 136,081 9 Office building 40 SL 166,000 166,000 32,000 48,575 117,425 10 Construction tools and equipment 12 DB / 0.23 365,312 365,312 13,500 251,662 113,650 11 Warehouse equipment (other equipment) 11 DB / 0.175 10,500 12 Hand tools 8 DB / 0.33 21,300 21,300 800 18,899 2,401 13 Mobile equipment 15 SL 134,200 134,200 14,500 83,790 50,410 14 Automobiles 4 SL 22,500 22,500 2,500 10,000 12,500 15 Office equipment 20 SL 21,760 21,760 1,000 15,051 6,709 16 Computer equipment 3 DDB / 0.625 36,000 36,000 2,500 11,250 24,750 17 4,662,242 4,662,242 142,300 707,811 3,954,431 18 19