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Problem 1 The Jill Corporation uses the revaluation model for their land holdings. They currently have two parcels of land, both purchased in 20x0....

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BUSI 2001 – Intermediate Accounting 1 - Fall 2016 Assignment 5 - Revaluation, Borrowing Costs, Intangibles Your assignment submission must be typed up in either Word and Excel and uploaded (one file only) to the assignment dropbox before midnight October 30, 2016. Problem 1 The Jill Corporation uses the revaluation model for their land holdings. They currently have two parcels of land, both purchased in 20x0. Data for the two land parcels are as follows: Land 1 Land 2 Original cost – 20x0 $500,000 $350,000 Fair value – Dec 31, 20x2 650,000 380,000 Fair value – Dec 31, 20x4 720,000 300,000 Fair value – Dec 31, 20x6 680,000 330,000 On July 14, 20x7, Land 1 was sold for $700,000. Write the journal entries to reflect all of the above. You do not need to write the 20x0 land purchase journal entries. Problem 2 The Jack Corporation uses the revaluation method for its buildings. One of the buildings was purchased on December 31, 20x0 at a cost of $2,000,000 and is being depreciated on the straight line method over 25 years. There is no residual value. The fair value of the building was assessed at $1,950,000, $1,500,000 and $1,360,000 at December 31, 20x2, December 31, 20x5 and December 31, 20x10 respectively. Write all journal entries relative to the building for the years ended December 31, 20x2, 20x5 and 20x10.
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2 Problem 3 The Bernie Corporation, a publically accountable entity, placed an order for an oil tanker on February 1, 20x5. The shipyard required a downpayment of $10 million. Additional payments on the tanker are as follows: April 1, 20x5 $4,000,000 June 1, 20x5 6,000,000 October 15, 20x5 3,000,000 November 30, 20x5 15,000,000 The tanker was delivered and placed in service on November 30, 20x5. Bernie borrowed $10,000,000 on February 2, 20x5 to make the down payment at a rate of 6%. This loan was paid off on November 30, 20x5. The company’s general borrowings are as follows: Interest Rate Amount Bank Loan 1 4% $20,000,000 Bank Loan 2 6% 50,000,000 Bank Loan 3 3.5% 40,000,000 Bank Loan 2 was paid off on August 31, 20x5. Bank Loan 3 was taken out on May 31, 20x5. Calculate the amount of borrowing costs that have to be capitalized to the tanker.
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Intermediate acctg 2001Assmt5F16 Oct 30.docx

Problem 1
The Jill Corporation uses the revaluation model for their land holdings. They currently
have two parcels of land, both purchased in 20x0. Data for the two land parcels are as
follows:
On...

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