On 13 September 20X1, Nitish Corp.s board of directors moved the companys operations into a newly constructed
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Question:
On 13 September 20X1, Nitish Corp.s board of directors moved the companys operations into a newly constructed building and declared its old building available for sale. The original cost of the old building was $36 million; it was 30% depreciated. Other information is as follows:
- On 15 September, a professional appraisal of the old building estimated its value as $19 million.
- On 24 September, Nitish engaged a commercial property developer to place the building on the market for $19 million. Despite some softness in the market the developer expects to be able to sell the building within the next nine months. The developer charges a commission of 4% on final sale.
- By 31 December, the commercial real estate market had softened considerably. Although the developer held the official asking price at $19 million, Nitish and the developer agreed they would consider offers as low as $17.5 million.
- Despite receiving several lowball offers from prospective buyers over the first two months of 20X2, Nitishs management did not accept any of the offers.
- By 31 March 20X2, the end of Nitishs first reporting quarter, the market had improved considerably. The developer relisted the property at $20.5 million, its newly appraised value.
- On 27 April 20X2, Nitishs board accepted an offer of $20.7 million.
Required: Prepare the appropriate general journal entries to record the information above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars amount.)
- Record the entry to offset the accumulated depreciation against the buildings cost.
- Record the professional appraisal of the old building.
- Record the entry to write down the building to its estimated recoverable amount.
- Record the entry to reclassify Building as current.
- Record the entry to further write-down to revaluation.
- Record the entry at the newly apprised value.
- Record the sale.
Posted Date: