What is the valuation technique to measure for tom parish

Assignment Help Financial Accounting
Reference no: EM132992339

Tom Parish is the owner of Eminent Furniture, a private company based in Western Australia. The main manufacturing location for 'Eminent' furniture is located in Malaga; a suburb of Perth, Western Australia. The land was purchased by Tom in 2008 for $260,000 and construction of the warehouse - and associated infrastructure (e.g. driveway, gates) - was completed on 1 July 2009 at a cost of $210,000. The warehouse is depreciated over a period of 40 years. The area in which the factory is located is zoned (i.e. classified) for industrial use. The fair value of the factory and land is estimated to be $800,000. The replacement cost of the factory is estimated to be $300,000.

Tom has become aware of the concept of highest and best use and believes that the warehouse is significantly undervalued. He believes that the highest and best use for the land is as high rise apartments and he would therefore like the value of the warehouse to reflect this and the value of any increment to be reflected in the Statement of Profit or Loss.

Problem 1: What is the appropriate valuation technique to measure the asset?

Reference no: EM132992339

Questions Cloud

Equity important for investors and lenders : Why is a company's owners' equity important for investors and lenders?
Determine the fair value of identifiable net assets of Sub : Parent Ltd acquired all of the issued share capital of Sub Ltd on 30 June 2020 for a cash consideration of $412,000. Determine the fair value of identifiable
Area of social work practice : Write a policy brief on any ONE chosen social issue which relate to an area of social work practice - social policy analysis to advocate for social policy
Theme of prejudice and discrimination in the novel : What would be a good theses statement for the theme of prejudice and discrimination in the novel The boy in striped pyjamas.
What is the valuation technique to measure for tom parish : Tom has become aware of the concept of highest and best use and believes, What is the appropriate valuation technique to measure the asset?
Discuss factors affecting diversity and talent management : Discuss four factors affecting diversity and talent management in the workplace of today
Equity important for investors and lenders : Why is a company's owners' equity important for investors and lenders?
Prepare the statement of cash flow : Prepare the Statement of Cash flow for the end of the financial year, 30 June 2021 for Marks and Company
Accountability regarding to information security : Discuss the three main areas of accountability regarding to information security. These are confidentiality, integrity and governance. When discussing each area

Reviews

Write a Review

Financial Accounting Questions & Answers

  Journalize the treasury stock transaction

Davies Corporation purchased 2,000 shares of its $10 par value common stock for $76,000 on August 1. It will hold these in the treasury until resold. Journalize the treasury stock transaction.

  Using the lower of cost or market method of valuation

etermine the amount of inventory to be reported on the financial statements using the lower of cost or market method of valuation under each of the following options. Lower of cost or market for each item separately. Lower of total cost or total mark..

  Prepare a complete depreciation table

Prepare a complete depreciation table under the two depreciation methods listed 150 percent declining-balance with a switch to straight-line

  Calculate the compound rate of the reduction in price

In October 2019 the price was reduced to $5.6 million. Calculate the compound rate of this reduction in price. (The rate should be calculated to two decimals.)

  Provide a brief discussion to the measurement model

Provide a brief discussion to the measurement model currently adopted by the accounting standard setters, including reasons why they have adopted

  Compute the current yield on both bonds for harold reese

Compute the current yield on both bonds. Bond X pays $96 annual interest and has a market value of $955. It has 12 years to maturity.

  Why is the fasab named an advisory board

Why is the FASAB named an advisory board? What is the relationship between the FASAB and the GAO, the Treasury Department, and the OMB?

  Prepare a cash basis income statement for the month of jan

Using the transaction data above, prepare (1) a cash-basis income statement, and (2) an accrual-basis income statement for the month of January. Using the transaction data above, prepare (1) a cash-basis balance sheet and (2) an accrual-basis balance..

  What is the reversionary right to life estate worth today

Actuarial tables indicate an expected life, or occupancy of the life estate for 13 years. At 8% interest, what is the reversionary right to the life estate

  Evaluate methods and systems for rewarding

Recommend strategies for determining appropriate compensation and rewards, based on team type. Evaluate methods and systems for rewarding

  How much should be recorded in martinez capital account

The land was sold for P50,000 on July 1, four hours after formation of the partnership. How much should be recorded in Martinez capital account

  How financial information be consistent but not comparable

How can financial information be consistent but not comparable? When might an amount on material to management but not to the CPA auditing the financial statements?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd