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Briefly outline how Glen Ltd should record each transaction

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Question - Glen Ltd, a property developer entered into the following transactions during the 2016 financial year. The balance date is 31 st December,

a) Glen Ltd bought land (Block 1) from Tom Ltd for $500,000. This land was right next to a piece ofland (Block 2) that Glen Ltd bought two years ago for $500,000. The two blocks are practically identical. Glen Ltd spent another $25,000 to improve Block 1I2so it has the same value as Block 112.

b) Mr Sione filed a lawsuit against Glen Ltd for $10,000 because one of Glen Ltd's vehicles allegedly damaged some of Mr Sione's property and crops. Glen Ltd expects that it will take no less than three years before the lawsuit is settled.

c) Glen Ltd bought shares worth $12,000 on 7 September 2016 and held the shares for investment. On 31 July 2017 the shares have a market value of$11,500.

Required - Briefly outline how Glen Ltd should record each transaction. Provide relevant journal entries.

Reference no: EM132568414

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