Exam case financial accounting Essay

Solutions to Exercises and Complications Tutorial you IFM Capitalize borrowing costs borrowing costs attributable to the construction of determining assets. Yearly depreciation (beginning in Year 2) ($1, 050, 000 / 40 years) $26, two hundred fifty Capitalize credit costs owing to the construction of qualifying property.

Annual depreciation (beginning in Yr 2) ($1, 050, 000 / forty years) $26, 250 1At December thirty-one, Year several, the reasonable value from the building is determined to be $970, 000. The carrying worth of the building is lowered by $27, 500, with a loss on revaluation recognized in Year 3 net income. 2 Depreciation in Yr 4 can be $25, 526 ($970, 000 / 37 remaining years).

3At January 31, 12 months 5, the fair benefit of the building is determined to be $950, 000. The having value in the building is increased simply by $31, 052. A change of revaluation loss of $27, 500 is usually recognized in income and $3, 552 ($31, 052 28, 500) is usually recorded as revaluation excess in shareholders’ equity.