Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Looking for the debit/credits. Thanks! On March 1, 2020, Flounder Corp. acquired a 10-unit residential complex for $1,267,000, paid in cash. An independent appraiser determined
Looking for the debit/credits. Thanks!
On March 1, 2020, Flounder Corp. acquired a 10-unit residential complex for $1,267,000, paid in cash. An independent appraiser determined that 75% of the total purchase price should be allocated to buildings, with the remainder allocated to land. On the date of acquisition, the building's estimated useful life was 25 years, with estimated residual value of $325,200. Flounder estimates that straight-line depreciation would best reflect the pattern of benefits it will receive from the building. Fair value of the complex, as assessed by an independent appraiser on each date, is as follows: Date December 31, 2020 December 31, 2021 December 31, 2022 Fair Value $1,321,920 $1,254,610 $1,222,790 The complex qualifies as an investment property under IAS 40 Investment Property. Flounder has a December 31 year end. Prepare the journal entries required for 2020, 2021, and 2022, assuming that Flounder applies the fair value model to all of its investment property. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Record entries in the order presented in the problem.) ate Debit Credit Account Titles and Explanation Investment Property 2020 1,267,000 Cash 1,267,000 1, 2020 Investment Property Gain or Loss in Value of Investment Property 2021 Gain or Loss in Value of Investment Property Investment Property 2022 Gain or Loss in Value of Investment Property Investment Property Prepare the journal entries required for 2020, 2021, and 2022, assuming that Flounder applies the cost model to all of its investment property. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Round answers to 0 decimal places, eg. 5,275. Record entries in the order presented in the problem.) Debit Credit Date Mar. 1, 2020 Account Titles and Explanation Buildings Land Cash Dec 31, 2020 Depreciation Expense Accumulated Depreciation - Buildings Dec 31, 2021 Depreciation Expense Accumulated Depreciation - Buildings Dec 31, 2022 Depreciation Expense Accumulated Depreciation - BuildingsStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started