Reference no: EM132755801

The company collects $5,500 subsequently on a specific account that had previously been determined to be uncollectible in part (c). Prepare the journal entries necessary to (1) restore the account and (2) record the cash collection. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)On 1 January 20X0, DEF Ltd purchased freehold land and building for
use in operations and incurred the following costs.

SGD$

Architect's fees for the new building 12,000
Cash paid for the run-down building 300,000
Removal of old building 18,000
Salvage from sale of old building materials 4,000
Construction survey to site the new building 1,500
Legal fees for land title search 3,000
Excavation for basement construction 25,000
Machinery purchased for operations 100,000
Freight on machinery purchased 1,600
Construction costs of new building 1,000,000
Fencing around the land 20,000
Installation of machinery 2,500

The land has an indefinite useful life. The new building has an estimated useful life of thirty years and a residual value of $100,000. Any land improvements have an estimated useful life of ten years and no residual value. Assume that the company adopts the Singapore Financial Reporting Standards. Assume further that the company adopts the double-declining balance ("DDB") method for building depreciation and straight-line method for land improvements. Where applicable, please round your answers to the nearest dollar.

Required:

Problem (a) Determine the costs to be capitalised as Land and the costs to be capitalised as Building based on Singapore Financial Reporting Standard 16 Property, Plant and Equipment. Clearly explain why you include or exclude certain costs in your determination.