Monty Corp. acquired a property on September 15, 2023, for $260,000, paying $3,000 in transfer taxes and a $2,000 real estate fee. Based on the provincial assessment information, 85% of the property's value was related to the building and 15% to the land. It is estimated that the building, with proper maintenance, will last for 20 years, at which time it will be torn down and have zero salvage value. Monty, however, expects to use it for 10 years only, as it is not expected to suit the company's purposes after that. The company should be able to sell the property for $171.000 at that time, with $43,000 of this amount being for the land. Monty prepares financial statements in accordance with IFRS.

Monty Corp. acquired a property on September 15, 2023, for $260,000, paying $3,000 in transfer taxes and a $2,000 real estate fee. Based on the provincial assessment information, 85% of the property's value was related to the building and 15% to the land. It is estimated that the building, with proper maintenance, will last for 20 years, at which time it will be torn down and have zero salvage value. Monty, however, expects to use it for 10 years only, as it is not expected to suit the company's purposes after that. The company should be able to sell the property for $171.000 at that time, with $43,000 of this amount being for the land. Monty prepares financial statements in accordance with IFRS.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 13P

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