Explain the cost of the property to be recorded

Assignment Help Business Management

Reference no: EM1355207

ABC Ltd is in the business of providing management consultation services in Parnell area. ABC bought a property on 1 July 2012 for a cost of $1,500,000. The property consists of land and building. The value of the land is $800,000 at time of purchase. The property is used as offices and seminar rooms. ABC renovates the property in order to make it suitable for its operation. The cost of renovation is $80,000.

The renovation is completed in 2 months after the purchase. ABC has a balance date of 30 June.

1. Determine the cost of the property to be recorded in the accounts. (Explain your answer with reference to NZ IAS 16).

2. Assume ABC depreciates the building part of the property on a straight-line basis. Depreciation is $40,000 each year for the building. The company depreciates its PPE to the nearest month. On 1 July 2013, the property is revalued to $1,700,000, of which the land portion appreciated by $100,000. Prepare journal entries to reflect the revaluation for both land and building of the property.

Reference no: EM1355207

Questions Cloud

Aspects of organizational cultures - target corporation : Prepare a word paper in which you describe the observable aspects of organizational cultures. describe the following aspects at their selected organization

Importance of accountability : Give an explanation of the importance of accountability as it relates to using assessment in the practice of counseling.

How much work is done by the man in pushing the mower : Coherent light with wavelength 601 passes through two very narrow slits, and interference pattern is observed on a screen a distance of 3.00 from the slits.

Illustrate which factory will experience diminishing returns : A firm has two factories, one twice as large as the second. As the number of workers at each factory increases. Illustrate which factory will experience diminishing returns first.

Explain the cost of the property to be recorded : Explain the cost of the property to be recorded in the accounts and Assume ABC depreciates the building part of the property on a straight-line basis

Organizational structures- good vs bad : What are good organizational structures that help management retain employees and what types of organizational structures create high turnover in organizations.

Triggers important in database systems : What are triggers used for, and why are they important in database systems? Provide an example of a situation where a trigger would be appropriate.

Situations and rationales for the test : Last provide a description for how each test would be used in certain situations and provide rationales for the use of each test in the situations described.

Organizational function at microsoft : Organizational Function at Microsoft - Evaluate how the organizational functions of Human Resources and Operations impacts the organizational structure of Microsoft.

User Account

All Pages