Reference no: EM132780548

Problem - ABC Corporation (ABC) is a public company engaged in manufacturing of wooden and steel furniture. All machines and owner occupied buildings are recorded under cost model. Buildings rented out are classified as investment properties and are recorded under fair value model. Special equipment are recorded under revaluation model. All owner occupied buildings are depreciated using straight line method.

ABC has policy of recording full year depreciation in the year of acquisition and no depreciation in the year of disposition. In use value for all the assets is assumed to be equal to fair value, and cost to sell for any asset is assumed to be NIL. Government grants are recorded under deferral method.

Machine #3: It was purchased on January 1, 2014 for $1,500,000. It initially had useful life of 10 years and estimated residual value of $200,000. It is depreciated using straight line method. In 2019, due to technological changes, its total useful life is revised to 8 year and revised residual value is $100,000. As at December 31, 2019, it has a fair value of $900,000.

Required - Prepare all necessary journal entries, correcting entries (if any) and adjusting journal entries for the fiscal year ending December 31, 2019. Show all calculations and round all numbers to the nearest cent.