Reference no: EM131796764

1. The Jill Corporation uses the revaluation model for their land holdings. They currently have two parcels of land, both purchased in 20x0. Data for the two land parcels are as follows:

Original cost - 20x0	Land 1 $500,000	Land 2 $350,000
Fair value - Dec 31, 20x2	650,000	380,000
Fair value - Dec 31, 20x4	720,000	300,000
Fair value - Dec 31, 20x6	680,000	330,000

On July 14, 20x7, Land 1 was sold for $700,000.

Write the journal entries to reflect all of the above. You do not need to write the 20x0 land purchase journal entries.

2. The Jack Corporation uses the revaluation method for its buildings. One of the buildings was purchased on December 31, 20x0 at a cost of $2,000,000 and is being depreciated on the straight line method over 25 years. There is no residual value.

The fair value of the building was assessed at $1,950,000, $1,500,000 and $1,360,000 at December 31, 20x2, December 31, 20x5 and December 31, 20x10 respectively.

Write all journal entries relative to the building for the years ended December 31, 20x2, 20x5 and 20x10.

3. The Bernie Corporation, a publically accountable entity, placed an order for an oil tanker on February 1, 20x5. The shipyard required a downpayment of $10 million. Additional payments on the tanker are as follows:

April 1, 20x5	$4,000,000
June 1, 20x5	6,000,000
October 15, 20x5	3,000,000
November 30, 20x5	15,000,000

The tanker was delivered and placed in service on November 30, 20x5. Bernie borrowed $10,000,000 on February 2, 20x5 to make the down payment at a rate of 6%. This loan was paid off on November 30, 20x5.

The company's general borrowings are as follows:

	Interest Rate	Amount
Bank Loan 1	4%	$20,000,000
Bank Loan 2	6%	50,000,000
Bank Loan 3	3.5%	40,000,000

Bank Loan 2 was paid off on August 31, 20x5. Bank Loan 3 was taken out on May 31, 20x5.

Calculate the amount of borrowing costs that have to be capitalized to the tanker.

4. Jenny Corporation commenced operations at the beginning of 20x2. During 20x2 the following selected transactions and events took place:

a) During January, Jenny incurred organization costs of $28,000 (legal and accounting fees paid to set up and register the corporation).

b) On January 31, Jenny acquired a patent for $12,000. The remaining legal life at the time of acquisition was 12 years. Jenny estimated, however, that the useful economic life was six years.

c) Throughout the year, the firm incurred costs of $16,000 to publicize its products.

d) Jenny acquired a franchise on July 1. The company paid an initial franchise fee on July I of $20,000. The franchise term is five years.

e) Jenny incurred research and development costs of $48,000 in the early stages of development of a patent. On October 1, the technical feasibility of the patent was established and at that time, another $15,000 was spent by Jenny: $2,000 in fees and costs of registering the patent and $13,000 to the chief engineer on the project, who signed a waiver granting all rights to the patent exclusively to Jenny. This patent was estimated to have a useful life of ten years.

Prepare journal entries to record the above expenditures and any required adjustments at the end of the year. Jenny's year is December 31, 20x2. Assume IFRS.