A partial statement of financial position of Ivanhoe Ltd. on December 31, 2022, showed the following property, plant, and equipment assets accounted for under the cost model (accumulated depreciation includes depreciation for 2022): Buildings Less: Accumulated depreciation Equipment Less: Accumulated depreciation $294,000 (To adjust the Buildings account to fair value) 94,000 $200,000 Ivanhoe uses straight-line depreciation for its building (remaining useful life of 20 years, no residual value) and for its equipment (remaining useful life of 8 years, no residual value). Ivanhoe applies IFRS and has decided to adopt the revaluation model for its building and equipment, effective December 31, 2022. On this date, an independent appraiser assessed the fair value of the building to be $146,000 and that of the equipment to be $100,000. (To eliminate the accumulated depreciation) $125,000 45,000 Prepare the necessary general journal entries, if any, to revalue the building and the equipment as at December 31, 2022, using the asset adjustment method. (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 O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation (To eliminate the accumulated depreciation) (To adjust the Equipment account to fair value) 80,000 Debit 100 00 Credit
A partial statement of financial position of Ivanhoe Ltd. on December 31, 2022, showed the following property, plant, and equipment assets accounted for under the cost model (accumulated depreciation includes depreciation for 2022): Buildings Less: Accumulated depreciation Equipment Less: Accumulated depreciation $294,000 (To adjust the Buildings account to fair value) 94,000 $200,000 Ivanhoe uses straight-line depreciation for its building (remaining useful life of 20 years, no residual value) and for its equipment (remaining useful life of 8 years, no residual value). Ivanhoe applies IFRS and has decided to adopt the revaluation model for its building and equipment, effective December 31, 2022. On this date, an independent appraiser assessed the fair value of the building to be $146,000 and that of the equipment to be $100,000. (To eliminate the accumulated depreciation) $125,000 45,000 Prepare the necessary general journal entries, if any, to revalue the building and the equipment as at December 31, 2022, using the asset adjustment method. (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 O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation (To eliminate the accumulated depreciation) (To adjust the Equipment account to fair value) 80,000 Debit 100 00 Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Question
![A partial statement of financial position of Ivanhoe Ltd. on December 31, 2022, showed the following property, plant, and equipment
assets accounted for under the cost model (accumulated depreciation includes depreciation for 2022):
Buildings
$294,000
Less: Accumulated depreciation
94,000
Equipment
$125,000
Less: Accumulated depreciation 45,000
(a)
Ivanhoe uses straight-line depreciation for its building (remaining useful life of 20 years, no residual value) and for its equipment
(remaining useful life of 8 years, no residual value). Ivanhoe applies IFRS and has decided to adopt the revaluation model for its
building and equipment, effective December 31, 2022. On this date, an independent appraiser assessed the fair value of the building
to be $146,000 and that of the equipment to be $100,000.
(To eliminate the accumulated depreciation)
Prepare the necessary general journal entries, if any, to revalue the building and the equipment as at December 31, 2022, using
the asset adjustment method. (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 O for the amounts. List all debit entries before credit entries.)
Account Titles and Explanation
(To adjust the Buildings
account to fair value)
$200,000
(To eliminate the accumulated
depreciation)
80,000
(To adjust the Equipment
account to fair value)
Debit
Credit
]][[[[](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F87fad0ee-75c5-4ca6-8c36-51ba51c6cde6%2Fe0dc9d33-f81d-4635-9cb0-94872fc2f0d2%2Fd7guuyx_processed.png&w=3840&q=75)
Transcribed Image Text:A partial statement of financial position of Ivanhoe Ltd. on December 31, 2022, showed the following property, plant, and equipment
assets accounted for under the cost model (accumulated depreciation includes depreciation for 2022):
Buildings
$294,000
Less: Accumulated depreciation
94,000
Equipment
$125,000
Less: Accumulated depreciation 45,000
(a)
Ivanhoe uses straight-line depreciation for its building (remaining useful life of 20 years, no residual value) and for its equipment
(remaining useful life of 8 years, no residual value). Ivanhoe applies IFRS and has decided to adopt the revaluation model for its
building and equipment, effective December 31, 2022. On this date, an independent appraiser assessed the fair value of the building
to be $146,000 and that of the equipment to be $100,000.
(To eliminate the accumulated depreciation)
Prepare the necessary general journal entries, if any, to revalue the building and the equipment as at December 31, 2022, using
the asset adjustment method. (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 O for the amounts. List all debit entries before credit entries.)
Account Titles and Explanation
(To adjust the Buildings
account to fair value)
$200,000
(To eliminate the accumulated
depreciation)
80,000
(To adjust the Equipment
account to fair value)
Debit
Credit
]][[[[
Transcribed Image Text:d. Prepare the entries to record depreciation expense for the year ended December 31, 2023
using the proportionate method. (Credit account titles are automatically indented when the
amount is entered. Do not indent manually. Do not indent manually. If no entry is required,
select "No
Entry" for the account titles and enter O for the amounts. Do not round Intermediate
calculations. Round final answers to 0 decimal places,
e.g. 5,275.)
Account Titles and Explanation
To record depreciation expense for Buildings)
To record depreciation expense for Equipment)
Show transcribed data
Debit
Credit
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