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On April 30, 2020, Grouper Corporation ordered a new passenger ship, which was delivered to the designated cruise port and available for use as of
On April 30, 2020, Grouper Corporation ordered a new passenger ship, which was delivered to the designated cruise port and available for use as of June 30, 2020. Overall, the cost of the ship was $95 million, with an estimated useful life of 12 years and residual value of $30 million. Grouper expects that the new ship, as a whole, will provide its greatest economic benefits in its early years of operation. After further research and discussion with management, it is determined that the ship consists of major parts with differing useful lives, residual values, and patterns of providing economic benefits: Pattern of benefits Total output (nautical miles) Part Cost Useful life Residual value Engines (6) $965,000 per engine 8 years $110.000 per engine Varies with activity 6 million Hull $3,700,000 10 years $504.000 Highest in early years 7.60 million Body $85.51 million 15 years $15.49 million Evenly over life of body 12.00 million The ship's first voyage took place on August 1, 2020. The ship sailed a total of 324,000 nautical miles in 2020. Grouper prepares financial statements in accordance with IFRS. Prepare the journal entry to record the purchase of the ship, assuming that Grouper paid cash for the purchase. (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.) Date Account Titles and Explanation Debit Credit June 30, 2020 e Textbook and Media Prepare the journal entries to record depreciation expense for 2020. (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. Do not round intermediate calculations. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit December 31, 2020 (To record depreciation on Ships Engines) December 31, 2020 (To record depreciation on Ships Hull) December 31, 2020 (To record depreciation on Ships Body
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