Garrett Corporation paid $200,000 to acquire land, buildings, and equipment. At the time of acquisition, Garrett paid $20,000 for an appraisal, which revealed the following values: land, $100,000; buildings, $125,000; and equipment, $25,000. Required: 1. What cost should the company assign to the land, buildings, and equipment, respectively? 2. Assume that Garrett uses IFRS and chooses to use the revaluation model to value its property, plant, and equipment. At the end of the year, the book value of the land, buildings, and equipment are $88,000, S104,000, and $19,000, respectively. The company determines that the fair value of the land, buildings, and equipment at the end of year is $108,000, S106,000, and $16,000, respectively. Prepare the journal entries that Garrett should make to value its property, plant, and equipment.
Garrett Corporation paid $200,000 to acquire land, buildings, and equipment. At the time of acquisition, Garrett paid $20,000 for an appraisal, which revealed the following values: land, $100,000; buildings, $125,000; and equipment, $25,000. Required: 1. What cost should the company assign to the land, buildings, and equipment, respectively? 2. Assume that Garrett uses IFRS and chooses to use the revaluation model to value its property, plant, and equipment. At the end of the year, the book value of the land, buildings, and equipment are $88,000, S104,000, and $19,000, respectively. The company determines that the fair value of the land, buildings, and equipment at the end of year is $108,000, S106,000, and $16,000, respectively. Prepare the journal entries that Garrett should make to value its property, plant, and equipment.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:2. Prepare the journal entries that Garrett should make to value its property, plant, and equipment under IFRS on December 31.
General Journal Instructions
PAGE 10
GENERAL JOURNAL
DATE
ACCOUNT TITLE
POST. REF.
DEBIT
CREDIT
2
3
4
5
6.
7
8
Transcribed Image Text:Garrett Corporation paid $200,000 to acquire land, buildings, and equipment. At the time of acquisition, Garrett paid $20,000 for an appraisal, which revealed the following values: land, $100,000;
buildings, $125,000; and equipment, $25,000.
Required:
1. What cost should the company assign to the land, buildings, and equipment, respectively?
2. Assume that Garrett uses IFRS and chooses to use the revaluation model to value its property, plant, and equipment. At the end of the year, the
book value of the land, buildings, and equipment are $88,000, $104,000, and $19,000, respectively. The company determines that the fair value
of the land, buildings, and equipment at the end of year is $108,000, $106,000, and $16,000, respectively. Prepare the journal entries that
Garrett should make to value its property, plant, and equipment.
Analysis
1. What cost should the company assign at acquisition to the land, buildings, and equipment, respectively?
Land
Building
Equipment
Total cost assigned $
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