E 11-8 IFRS. Dower Corporation prepares its financial statements according to IFRS. On March 31, 2011, the company

E 11-8 IFRS. Dower Corporation prepares its financial statements according to IFRS. On March 31, 2011, the company

ANSWER KEY E 11-8 IFRS; revaluation of machinery; depreciation

Dower Corporation prepares its financial statements according to IFRS. On March 31, 2011, the company purchased equipment for $240,000. The equipment is expected to have a six-year useful life with no residual value. Dower uses the straight-line depreciation method for all equipment. On December 31, 2011, the end of the company's fiscal year, Dower chooses to revalue the equipment to its fair value of $220,000.

Required:

1. Calculate depreciation for 2011.

2. Prepare the journal entry to record the revaluation of the equipment. Round calculations to the nearest thousand.

3. Calculate depreciation for 2012.

4. Repeat requirement 2 assuming that the fair value of the equipment at the end of 2011 is $195,000.

CLICK HERE FOR THE SOLUTION