Lse the dlata ser on sthe prevtous page and assume the Actixs s) What i the anmu

Question

Lse the dlata ser on sthe prevtous page and assume the Actixs s) What i the anmual the Activity Metthod of Depreciation is ahopred as a) 5as,000 per year b) sso,o00 per year c) S1S.o0 per machine hour rate? s16.67 per machine hour None of the above e) How much depreciation a) S22,soo expense will be recorded in fiscal 2017 b) S25,000 c) $45,000 d) S67.500 e) $75,000 Use the following information to answer multiple choice questions 7 9. Snow Ltd. acquired a shopping center costing Ss.4 million in exchange for cash on May 1,201 will classify this purchase as an investment property (rather than a capital asset) purchase the land accounted for 25% of the purchase price, with the remainder a building itself. At the time of The shopping center will be operated for the next 15 vears after which time it is anticipated it could be sold for an estimated S4.5 million. Snow Ltd. has chosen to apply the Fair Value Model to account for this investment property. At December 31, 2017 the shopping center was appraised at S6.0 million. The journal entry to record the purchase of the shopping center would involve: a) A debit to Land for $1,350,000 b) A debit to Building for $4,050,000 c) A debit to Investment in Rental property for $5,400,000 d) A credit to a mortgage liability for $5,400,000 e) Both (a) and (b) 7) 8) The depreciation expense recorded on the shopping center at December 31, 2017 would be: a) SO b) $30,000 c) $40,000 d) $45,000 e) S60,000 Page 9 of

Explanation / Answer

Question no.7

Journal Entry

Option E is correct:Both (a) and (b)

Question No.8

Land is no depricable Assets, so Land is not depreciated.

Building = Purchase - Salvage Value/useful life of Asset

=4050000-3375000(4500000*75%)/15 Years

=675000/15

=45000

Depreciation = 45000*8/12(May to December)

=$ 30000

Option B is Correct

Question No.9

Option B is Correct : Gain Value of Investment Property 600000 reorted Other Comprehensive income

Question No.10

Option A is Correct: Identifiability, non-Physical existence , and Nonmonetary nature

Question No.11

Option A is correct . Amortized over the lesser of the Legar or useful life

.

Particulars Debit $ Credit $ Land A/C Dr 1,350,000(5400000*25%) Building A/c Dr 4,050,000 To Casj A/c 5,400,000

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.