acct1511 2010s2w04 HomeQ - Cr Revaluation Reserve $50,000...

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ACCT1511 Suggested solutions to homework questions – Week 4 Problem 9.27 1. (i) $4,000; (ii) $3,050; (iii) $5,000; (iv) 0 2. (i) $60,000 – (2*4000) = $52,000; (ii) $36,600 – (2*3050) = $30,500; (iii) 35,000 – (2*5000) = $25,000; (iv) $90,000 (assuming Higgins Ltd did not impair any of its intangible assets). 3. Carrying amount on 1 July 2010 = $36,600 - $3,050 = $33,550 Impairment loss = $33,550 - $17,500 = $16,050
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Homework Question: Comparison between cost and revaluation method Land Cost Method (AASB116/136) Revaluation Method (AASB116) Recorded Value Journal Entry Recorded Value Journal Entry Y 0 Buy for $100,000 $100,000 Dr Land $100,000 CR Cash $100,000 $100,000 Dr Land $100,000 CR Cash $100,000 Y 1 Market value: $150,000 $100,000 $150,000 Dr Land $50,000
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Unformatted text preview: Cr Revaluation Reserve $50,000 (OCI) Y 2 Market value: $120,000 $100,000 $120,000 Dr Revaluation Reserve $30,000 (OCI) Cr Land $30,000 Y 3 Market value: $75,000 $75,000 Dr Loss on impairment of Land $25,000 Cr Allowance for impairment $25,000 $75,000 Dr Loss on devaluation of Land $25,000 (Income) Dr Revaluation Reserve $20,000 (OCI) Cr Land $45,000 Y 4 Market value: $100,000 $100,000 $75,000 Dr Allowance for impairment $25,000 Cr Gain on re-evaluation of Land $25,000 OR Do nothing $100,000 Dr Land $25,000 Cr Gain on revaluation of Land $25,000 (Income) OCI= Other comprehensive income (AASB101) Note: new terminology: Revaluation Reserve instead of Asset Revaluation Reserve. Special thanks to Brian Booth for his technical expertise....
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This note was uploaded on 09/22/2011 for the course ACCT 1511 taught by Professor Kim during the One '10 term at University of New South Wales.

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acct1511 2010s2w04 HomeQ - Cr Revaluation Reserve $50,000...

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