Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Parnell Company acquired construction equipment on January 1,2020 , at a cost of $79,200. The equipment was expected to have a useful life of five

image text in transcribed

image text in transcribed

image text in transcribed

Parnell Company acquired construction equipment on January 1,2020 , at a cost of $79,200. The equipment was expected to have a useful life of five years and a residual value of $13,000 and is being depreciated on a straight-line basis. On January 1, 2021, the equipment was appraised and determined to have a fair value of $75,700, a salvage value of $13,000, and a remaining useful life of four years. In measuring property, plant, and equipment subsequent to acquisition under IFRS, Parnell would opt to use the revaluation model in IAS 16. Assume that Parnell Company is a U.S.-based company that is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes. Required: a. Prepare journal entries for this equipment for the years ending December 31, 2020, and December 31, 2021, under (1) U.S. GAAP and (2) IFRS. b. Prepare the entry(ies) that Parnell would make on the December 31,2021, conversion worksheet to convert U.S. GAAP balances to IFRS. Prepare journal entries for this equipment for the years ending December 31 (2) IFRS. (If no entry is required for a transaction/event, select "No journal Record the entry for the surplus on revaluation of equipment due to conversion from U.S. GAAP to IFRS. Record the entry for depreciation expense as per U.S. GAAP. 3 Record the entry for depreciation expense as per IFRS. 4 Record the entry for the revaluation of equipment as per IFRS. 5 Record the entry for depreciation expense as per IFRS. Note : = journal entry has been entered Prepare the entry(ies) that Parnell would make on the December 31,2021 , conversion wo IFRS. (If no entry is required for a transaction/event, select "No journal entry required" in Record the entry for recording profit on revaluation of equipment due to conversion from U.S. GAAP to IFRS. 2 Record the entry for additional depreciation expense on revaluation of equipment due to conversion from U,S. GAAP to IFRS

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

Fundamentals of Cost Accounting

Authors: William Lanen, Shannon Anderson, Michael Maher

3rd Edition

9780078025525, 9780077517359, 77517350, 978-0077398194

More Books

Students also viewed these Accounting questions

Question

When is the deadline?

Answered: 1 week ago

Question

What is the use of bootstrap program?

Answered: 1 week ago

Question

What is a process and process table?

Answered: 1 week ago

Question

What is Industrial Economics and Theory of Firm?

Answered: 1 week ago