Part A - Early Recognition of Fix Assets

X corp purchased a new machine to improve its production process on 30 June 2020. The following costs were incurred by X corp in the purchase process:

Purchase fee: 100,000

Promotion fee: 12,500

Administrative costs: 3,750

Installation cost: 11,000

Sales of production results from testing activities: 9,000

Training fee: 2,000

Professional fee: 5,000

The cost of removing the wall to get the machine in: 1,200

Import duties: 10,000

Instructions

a. At what value was the machine recognized for the first time?

b. If the machine has a useful life of 20 years and there is no residual value, how much will the machine be depreciated by December 31, 2020, if the company uses the (a) straight-line method, (b) multiple declining balance

Part B - Next Measurement

On July 1, 2020, J Corp purchased equipment for IDR 600,000,000. Management estimates that this equipment will have a useful life of 4 years with a residual value of IDR 10,000,000. The company has the following information regarding equipment:

December 31, 2021, Fair Value IDR 450,000,000

December 31, 2023, Fair Value IDR 50,000,000

A corp has not yet determined whether they want to apply a cost model or a revaluation model for this equipment because management wants to consider the impact of implementing existing models.

Instructions:

a. Prepare journal entries in 2021 and 2023 for J corp if they use the cost model for this equipment.

b. if they use a revaluation model for this equipment. (Use elimination method)

c. Make a comparison of the presentation of these two models in the statement of financial position and other statements of comprehensive income in 2021 and 2023.

Part C - Borrowing Costs

M corp is currently constructing an office building in the Bekasi area that will be used by the company itself. The project started on January 1, 2020. Construction-related expenditure data collected by the company are as follows:

Issue Date

January 1, 2020: IDR 240,000,000

31 July 2020: 360,000,000

31 December 2020: 180,000,000

In order to work on this project, on January 1, 2020, the company specifically borrowed funds (at par) of IDR 300,000,000 from the Bank. The debt has an interest of 8% which is payable annually on January 1. The debt will mature on January 1, 2023.

Apart from the bank loans above, the company also has notes payable with a principal amount of IDR 200,000,000 which were issued at par on July 1, 2019. These notes have a maturity of three years and have an interest of 10%. Interest is paid every July 1.

Instructions:

For 2020, calculate (1) the weighted-average accumulated expenditure; (2) avoidable interest; (3) actual interest; and (4) capitalized interest! what is journal to record these capitalized borrowing costs!