Exam case financial accounting Essay

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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.

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