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During the 2021/2022 financial year, the company had following events.
On 1 April 2022, ABC Industry purchased additional 30,000 allowances on the market as the initially granted emission allowances seemed insufficient to settle their obligations (emission liabilities). On this date, the fair value of an allowance was $60.
1) How to recognise the Purchased emission allowances? As an intangible asset, inventory, debtor? Your team need to explain why the emission allowances should be recognised as such.
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- On 1 January 2022, ABC Industry received 10,000 emission allowances at no cost from the Government. Each allowance represents the right to emit one tonne of greenhouse gases. The fair value of an allowance was $50 on the grant day. 1) How to recognise the granted and purchased emission allowances? As an intangible asset, inventory, debtor?Chaos Ltd. has been served a legal notice on December 15, 2019, by the local environmental protection agency (EPA) to fit smoke detectors in its factory on or before June 30, 2020. The cost of fitting smoke detectors in its factory is estimated at € 250,000. How should Chaos Ltd. treat this in its financial statements for the year ended December 31, 2019?Bebe Co. purchased equipment with an invoice price of P1,680,000 on March 5, 2021. How much would be the claimable input VAT on the second quarter of 2021? Bebe Co. purchased equipment with an invoice price of P1,680,000 on March 5, 2022. How much would be the claimable input VAT on the second quarter of 2021? Bebe Co. purchased equipment costing P560,000 on March 5, 2021. How much would be the claimable input VAT on the second quarter of 2021?
- 1. On December 31,2020 the account for Shane Oil Company's individually insignificant unproved properties had a balance of $600,000. The impairment allowance account had a balance of $100,000. Required Give the entries for each of the following transactions occurring in 2020 and 2021 (all transactions concern individually Insignificant unproved leases) a.Assuming Shane has a policy of maintaining a 60% allowance, i.e. 60% of gross unproved properties, give the entry to record impairment on December 31, 2020 b.During 2021 Shane surrendered leases that cost $200,000. c.During 2021,leases that cost $40,000 were proved d.Give the entry to record impairment on December 31, 2021.Whispering Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials in 2026 at a cost of $967,800. At December 31, 2025, the raw materials to be purchased have a market value of $917,200. Prepare any necessary December 31, 2025, entry. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Dec. 31 Estimated Liability on Purchase Commitments Debit 50600 Credit 50600On December 31, 2020, the account for Michael Oil Company's individually insignificant unproved properties had a balance of $650,000. The impairmen allowance account had a balance of $60,000. Required: Give the entries for each of the following transactions occurring in 2020 and 2021 (all transactions concern individually insignificant unproved leases)- a Assuming Michael has a policy of maintaining a 48% allowance, i.e. 48% of gross unproved properties, give the entry to record impairment on December 31, 2020. b. During 2021, Michael surrendered leases that cost $220,000. c. During 2021, leases that cost $48,000 were proved. d. Give the entry to record impairment on December 31, 2021.
- Provide the necessary accounting entries: A patent right is acquired July 1,2021, for P250,000; while it has a legal life of 15 years, due to rapidly changing technology, management estimates a useful life of only five years. "Netting" method, straight-line amortization will be used. At January 1, 2022, management is uncertain that the process can actually be made economically feasible, and decides to write down the patent to an estimated market value of P75,000. Amortization will be taken over three years from that point. On January 1, 2024, having perfected the related production process, the asset is now appraised at a depreciated replacement cost of P300,000. Furthermore, the estimated useful life is now believed to be six more years.Respond to the requirements in each situation. Instructions a. On January 1, 2020, Zarle Inc. sold computer equipment to Daniell Co. The sales price of the equipment was $520,000 and its carrying amount is $400,000. Record any journal entries necessary for Zarle from the sale of the computer equipment in 2020. b. Use the information from part a. Assume that, on the same day the sale occurred, Zarle enters into an agreement to lease the equipment from Daniell for 10 years with annual lease payments of $67,342.42 at the end of each year, beginning on December 31, 2020. If Zarle has an incremental borrowing rate of 5% and the equipment has an economic useful life of 10 years, record any journal entries necessary for Zarle from the sale and leaseback of computer equipment in 2020. c. Use the information from part b. Now, instead of 10 years, the lease term is only 3 years with annual lease payments of $67,342.42 at the beginning of each year. Record any journal entries necessary…Suppose a company using IFRS acquires the ownership rights to a celebrity photograph on December 1, 2014, for $ 530. The company accounts for these rights under the revaluation model. Assume the fair value at relevant dates is as follows. December 1, 2014 $530 December 31, 2014 $550 December 31, 2015 $520 December 31, 2016 $510 December 31, 2017 $565 What are the balances in revaluation surplus at the end of each year? How much revaluation is recognized through OCI each year? How much revaluation is recognized in income each year?
- Obra Ltd is your client. It has adopted IFRS as the financial reporting framework and has asked you to assist in dealing with the following issues. On I January 2014 Obra Ltd acquired a machine under the following terms. Manufacturer's base price GHS1,050,000 Trade discount (applying to base price only) 20% Early settlement discount taken (on the payable amount of the base cost only) 5% Freight charges GHS 30,000 Electrical installation cost GHS 28,000 Staff training in use of machine GHS 40,000 Pre-production testing GHS 22,000 Purchase of a three-year maintenance contract GHS60,000 Estimated residual value GHS 20,000 Estimated life in machine hours 6,000 hours Hours used -year ended 31 December 2014 - 1,200 hours - year ended 31 December 2015 1,800 hours - year ended 31 December 2016 (see below) 850 hours On I January 2016 Obra Ltd decided to upgrade the machine by adding new…On July 2021, Publicus sold a machine to a customer for £500,000 (excluding value added tax), and the customer paid in full when the machine was delivered on that date. In addition to the machine, Publicus agreed to provide maintenance for thirty months ending on 31 December 2023. Publicus has allocated E446,000 of the transaction price to the machine and g54,000 to the maintenance agreement. How much revenue should Publicus recognise from this sale in its income statement for the year to 31 December 2021? a. £467,600 b. £500,000 c. £456,800 d. £446,000Culver Corp., a public company using IFRS, signed a long-term non-cancellable purchase commitment with a major supplier to purchase raw materials at an annual cost of $2,300,000. At December 31, 2019, the raw materials to be purchased in 2020 have a market price of $2,095,000. Prepare any December 31, 2019 entry that is needed. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2019 enter an account title for the journal entry on December 31, 2019 enter a debit amount enter a credit amount enter an account title for the journal entry on December 31, 2019 enter a debit amount enter a credit amount In 2020, Culver receives the raw materials and pays the required $2,300,000. The raw materials now have a market value of…