80.2K

Verified Solution

Link Copied!

Consider the following independent situations for Blue Spruce Corporation. Blue Spruce applies ASPE. Situation 1: Blue Spruce purchased equipment in 2013 for $156,600 and estimated a $12,600 residual value at the end of the equipments 10-year useful life. At December 31, 2019, there was $100,800 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2020, the equipment was sold for $39,800. Situation 2: Blue Spruce sold a piece of machinery for $11,320 on July 31, 2020. The machine originally cost $41,880 on January 1, 2012. It was estimated that the machine would have a useful life of 12 years with a residual value of $3,000, and the straight-line method of depreciation was used. Situation 3: Blue Spruce sold equipment that had a carrying amount of $4,600 for $6,800. The equipment originally cost $12,600 and it is estimated that it would cost $17,600 to replace the equipment.

QUESTIONS:

Prepare the appropriate journal entries to record the disposition of the property, plant, and equipment assets, assuming that Blue Spruces fiscal year end is December 31 and that Blue Spruce only prepares financial statements and adjusts the accounts annually.

Situation 1:

- (To record depreciation on equipment)

-(To record disposal of equipment)

Situation 2:

-(To record depreciation on machinery)

-To record disposal of machinery)

Situation 3:

QUESTION:

How would the journal entries in part (a) change if Blue Spruce Corporation applied IFRS?

Situation 1:

- (To record depreciation on equipment)

-(To record disposal of equipment)

Situation 2:

-(To record depreciation on machinery)

-To record the disposal of machinery)

Situation 3:

Answer & Explanation Solved by verified expert

See Answer