Reference no: EM132947038

Questions -

Q1. BOUGAINVILLEA Company acquired a building on January 1, 2017 at a cost of 20,000,000. The building had a useful life of six years and residual value of 2,000,000. The building was revalued on January 1, 2020 and the revaluation revealed replacement cost of 30,000,000, residual value of 4,000,000 and revised useful life of 8 years from the date of acquisition. What is the revaluation surplus on January 1, 2020?

Q2. DAFFODIL Company had the following transactions pertaining to its new office building: Purchase price of land -1,200,000; Legal fees for contracts to purchase land -140,000; Architect's fee -256,000; Demolition of old building on site -315,000; Sale of scrap from old building -71,000; Construction cost of new building (fully completed) -2,450,000; Fire insurance policy on the newly constructed building for the whole year starting on the day it was completed -250,000. At what amount should the building be shown in DAFFODIL's statement of financial position of?

Q3. For the year ended, December 31, 2020, GERBERA Company estimated its allowance for uncollectible accounts using the year-end aging of accounts receivable. The following data are available: Allowance for uncollectible accounts, 1/1/20 -56,000; Provision for uncollectible accounts during 2020 ( 2% on credit sales of 2,000,000) -40,000; Uncollectible accounts written off, 11/30/20 -46,000; Estimated uncollectible account per aging, 12/31/20 -69,000. After the year-end adjustment, the uncollectible accounts expense for 2020 should be?

Q4. On January 1, 2020, HIBISCUS Company purchased 4,000 of 1,000 face value, 10% bonds of IXORA Company for 4,270,600. The bonds will mature on January 1, 2025 and pay interest semi-annually on January 1 and July 1. Bonds effective interest rate is 8%. HIBISCUS has a business model of collecting all the contractural cash flows related to the instrument. How much should HIBISCUS report as interest income on the bonds?