Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 4 (20 marks) On 1 January 2011, KKA Co purchased a property and used it as the company back office for administrative staff at

image text in transcribed

Question 4 (20 marks) On 1 January 2011, KKA Co purchased a property and used it as the company back office for administrative staff at a cost of $3,000,000. Due to a business restructure, on 30 June 2020, KKA Co decided to relocate all administrative staff to one of its production centres. On the same day, KKA Co rented out its head office to another company. KKA Co adopts the fair value model of accounting for investment property according to HKAS 40 Investment Properties and the revaluation model for property according to HKAS 16 Property, Plant and Equipment. The company has followed a policy of depreciating the property over 30 years using the straight-line method. At 31 December 2020, the property was valued at $4,000,000. Required: Calculate the gain or loss on revaluation of property. (6 marks) b Prepare journal entries for recording the relevant transactions for the year ended 31 December 2020. (7 marks) c Explain the subsequent measurement and accounting treatment of the property after 31 December 2020. (7 marks)

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

Bank Performance, Risk And Firm Financing

Authors: P. Molyneux

1st Edition

0230313353, 9780230313354

More Books

Students also viewed these Accounting questions

Question

Define critical thinking. (p. 231)

Answered: 1 week ago