Prepare journal entries for any revaluations permitted

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Problem 1: State whether the following assets may be revalued and if not why. Prepare journal entries for any revaluations permitted by accounting standards. Assume that each item listed below represents a separate class of assets.

(a) A company has deferred development costs of $400,000 and the estimated recoverable amount for the development project is $700,000.

(b) A Company purchased a publishing title two years ago for $1.5 million when another publisher went into liquidation. The book has been very successful, and management believes that it could probably sell for $ 2 million if the ever put it on the market.

(c) A company acquired a franchise for an ice-cream stand at a shopping mall costing $150,000. There is great demand for this type of franchise as evidenced by recent sales of equivalent franchise at other shopping malls. The current market price for sch a franchise is $200,000.

(d) A company has developed a masthead for its newspaper to the point where is a very valuable asset. Although the masthead is not currently recognised, management believes it could be sold for at least $2.5 million.

Reference no: EM132678139

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