Question

Exercise 10-25 A partial statement of financial position of Sunland Ltd. on December 31, 2019, showed the following property, plant, and equipment assets accounted for under the cost model (accumulated depreciation includes depreciation for 2019): Buildings Less: accumulated depreciation Equipment Less: accumulated depreciation $346,000 146,000 $200,000 $127,000 47,000 80,000 Sunland 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). Sunland applies IFRS and has decided to adopt the revaluation model for its building and equipment, effective December 31, 2019. On this date, an independent appraiser assessed the fair value of the building to be $142,000 and that of the equipment to be $106,000. Prepare the necessary general journal entries, if any, to revalue the building and the equipment as at December 31, 2019, 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.) Debit Credit Date Account Titles and Explanation Dec 31, 2019 (To eliminate the accumulated depreciation) Dec 31, 2019 (To adjust the Buildings account to fair value) Dec. 31, 2019 (To eliminate the accumulated depreciation) Dec. 31, 2019 (To adjust the Equipment account to fair value)

Answer 1

Date	Account title and expnalation	Dr	Cr
31-Dec-19	Building A/C	146000
	Depreciation on building A/c		146000
	(To eleminate the accumulated deprecition)
31-Dec-19	Depreciation on building A/c	350000
	Building		350000
	(To adjust the building account to fair value)
31-Dec-19	Equipment A/C	47000
	Depreciation on equipment A/c		47000
	(To eleminate the accumulated deprecition)
31-Dec-19	Depreciation on equipment A/c	68000
	Equipment A/C		68000
	(To adjust the equipment account to fair value)
31-Dec-20	Depreciation on building A/C	7100
	Building A/C		7100
	(To record depreciation expense for building)
31-Dec-20	Depreciation on equipment A/C	5300
	Equipment A/C		5300
	(To record depreciation expense for equipment)

Workings
Depreciation for the year ended 31 December 2020
New carrying amount Building	142,000
Remaining useful life of building	20
Depreciation per year	7,100
New carrying amount equipment	106,000
Remaining useful life of equipment	20
Depreciation per year	5,300