Prepare loctorism journal entry needed using the elimination

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Reference no: EM133344950

Question 1

Loctorism Inc. uses the revaluation model (elimination method) to account for equipment. Upon inception of the company Loctorism purchased a $300,000 equipment on July 1, 2019 (fiscal year end is June 30th). The revaluation of the building is done every 2 years. Straight-line depreciation is used and the useful life of the building is estimated to be 50 years (no residual value). The fair value of the building at June 30, 2021 is $305,000.

Required: Prepare Loctorism's journal entry needed using the elimination method at June 30, 2021

Question 2

Huskian Refineries Inc. receives a grant of $1,500,000 on April 1, 2021 from the Canadian federal government to upgrade its emission control equipment in its oil refinery in Fort McMurray, Alberta, which costed $3,000,000 and purchased on April 1, 2021. The new emission control equipment has a 20 year life and is depreciated using the straight-line method, no residual value. (Huskian Refineries Inc.'s year-end is March 31st).

Required: Using the deferral method prepare Huskian Refineries prepare 3 journal entries to record the receipt of the grant, the depreciation expense of the equipment and the amortization of the grant for the first year. Leave an empty line between each journal entry

Question 3

Huskian Refineries Inc. receives a grant of $800,000 on June 1, 2021 from the Canadian federal government to upgrade its emission control equipment in its oil refinery in Fort McMurray, Alberta. The new emission control equipment has a 20 year life and is depreciated using the straight-line method. (Huskian Refineries Inc.'s year-end is March 31st).

Required: Using the net method prepare Huskian Refineries journal entry to record the receipt of the grant.

Reference no: EM133344950

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