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Problem 10-11 Culver Manufacturers Inc., a publicly listed company, has two machines that are accounted for under the revaluation model. Technology in Culver's industry is fast-changing, causing the fair value of each machine to change significantly approximately every two years. The following information is available: Machine #1 Machine #2 Acquisition date Jan. 2, 2014 June 30, 2013 Original cost 455,000 600,000 Original estimate of useful life 8 years 12 years Original estimate of residual value -0- -0- Pattern of depreciation Straight-line Straight-line Fair value at Dec 31, 2015 321,250 489,500 Balance in Machinery account after proportionate method revaluation on Dec 31, 2015 428,333 618,315 Balance in Accumulated Depreciation account after proportionate method revaluation on Dec. 31, 2015 107,083 128,815 Cumulative balance in (Revaluation Gain or loss/ Revaluation Surplus (OCT) at Jan 1, 2017 (20,000) 14,500 Fair value at Dec 31, 2017 236,500 327,000 Both machines were last revalued on December 31, 2015. Culver has a December 31 year end. Prepare the journal entries required for 2017, using the asset adjustment method. (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 for the amounts. Round answers to o decimal places, e.g. 5,275.) Debit Credit No. Account Titles and Explanation Machine #1 1 Prepare the journal entries required for 2017, using the asset adjustment method. (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 o for the amounts. Round answers to o decimal places, e.g. 5,275.) Debit Credit No. Account Titles and Explanation Machine 21 1. (To record depreciation) 2 (To adjust depreciation on machinery) 3. (To adjust machinery) Machine #2 1. Triin Version 4.2 Machine 2 1 (To record depreciation 2. (To adjust depreciation on machinery) 3. (To adjust machinery Prepare the journal entries required for 2017, using the proportionate method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. no entry is required, select "No Entry" for the account titles and enter for the amounts. Do not round Intermediate calculations. Round answers to decimal places, e.g. 5,27 Debit Credit No. Account Titles and Explanation Machine 1 1 No. Account Titles and Explanation Machine #1 Debit Credit 1 (To record depreciation expense on machinery) 2. (To adjust the Machinery account to fair value) Machine #2 1. (To record depreciation expense on machinery) 2. (To record depreciation expense on machinery) 2 I (To adjust the Machinery account to fair value) Prepare a continuity schedule showing for each machine the amounts recorded to the Machine account and to the accumulated Depreciation account, as well as indicating the carrying amount for each fiscal year from date of purchase to December 31, 2017, using (1) the asset adjustment method and (2) the proportionate method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round answers to decimal places, e.g. 5,275.) Revaluation Model - Asset Adjustment Method Revaluation Model - Proportionate Method Mach. #1 Accum. Depr. Carrying Amount Mach. 1 Accum. Depr. Carrying Amount Jan. 2, 2014 $ Depreciation Dec 31, 2014 Depreciation Prepare a continuity schedule showing for each machine the amounts recorded to the Machine account and to the accumulated Depreciation account, as well as indicating the carrying amount for each Fiscal year from date of purchase to December 31, 2017, using (1) the asset adjustment method and (2) the proportionate method. (Enter negative amounts using either a negative in preceding the number e.g. -45 or parentheses e... (45). Round answers to o decimal places, e.g. 5,275.) Revaluation Model - Asset Adjustment Method Revaluation Model - Proportionate Method Mach. #1 Accum. Depr. Carrying Amount Mach 1 Accum. Depr. Carrying Amount Jan. 2, 2014 s Depreciation I Dec 31, 2014 Depreciation Unadj. Dec. 2015 Reval. Adjustment Reval. Gain or loss Dec 31, 2015 Deprec. (6 yrs.rem.) Dec 31, 2016 Depreciation Unadj. Dec, 2017 Ver on 4.2.2 Dec 31, 2016 Depreciation Unadj. Dec, 2017 Reval Adjustment Rev. Gain or Loss Reval. Surplus (OCT) Dec 31, 2017 $ Revaluation Model - Asset Adjustment Method Mach. 32 Accum. Depr. Carrying Amount Revaluation Model - Proportionate Method Mach. #2 Accum. Depr. Carrying Amount Jan 2, 2013 $ Depreciation Dec 31, 2013 Depreciation Dec 31, 2014 Depreciation Version 4.24.20 Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc. Revaluation Model - Asset Adjustment Method Mach. 2 Accum. Depr. Carrying Amount Revaluation Model - Proportionate Method Mach 2 Accum. Depr. Carrying Amount Jan. 2. 2013 $ Depreciation Dec 31, 2013 Depreciation Dec 31, 2014 Depreciation Unadj. Dec, 2015 Reval Adjustment Reval. Surplus (OCI) Dec 31, 2016 Deprec. (9.5 yrs. rem.) Dec 31, 2016 Depreciation PRINTER VERSION IS Unadj. Dec. 2015 Reval. Adjustment Reval. Surplus (OCT) Dec 31, 2016 Deprec. (9.5 yrs. rem.) Dec 31, 2016 Depreciation Unadj. Dec, 2017 Reval. Adjustment Reval. Surplus (OCI) Rev. Gain or Loss Dec. 31, 2017 $ $ Problem 10-11 Culver Manufacturers Inc., a publicly listed company, has two machines that are accounted for under the revaluation model. Technology in Culver's industry is fast-changing, causing the fair value of each machine to change significantly approximately every two years. The following information is available: Machine #1 Machine #2 Acquisition date Jan. 2, 2014 June 30, 2013 Original cost 455,000 600,000 Original estimate of useful life 8 years 12 years Original estimate of residual value -0- -0- Pattern of depreciation Straight-line Straight-line Fair value at Dec 31, 2015 321,250 489,500 Balance in Machinery account after proportionate method revaluation on Dec 31, 2015 428,333 618,315 Balance in Accumulated Depreciation account after proportionate method revaluation on Dec. 31, 2015 107,083 128,815 Cumulative balance in (Revaluation Gain or loss/ Revaluation Surplus (OCT) at Jan 1, 2017 (20,000) 14,500 Fair value at Dec 31, 2017 236,500 327,000 Both machines were last revalued on December 31, 2015. Culver has a December 31 year end. Prepare the journal entries required for 2017, using the asset adjustment method. (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 for the amounts. Round answers to o decimal places, e.g. 5,275.) Debit Credit No. Account Titles and Explanation Machine #1 1 Prepare the journal entries required for 2017, using the asset adjustment method. (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 o for the amounts. Round answers to o decimal places, e.g. 5,275.) Debit Credit No. Account Titles and Explanation Machine 21 1. (To record depreciation) 2 (To adjust depreciation on machinery) 3. (To adjust machinery) Machine #2 1. Triin Version 4.2 Machine 2 1 (To record depreciation 2. (To adjust depreciation on machinery) 3. (To adjust machinery Prepare the journal entries required for 2017, using the proportionate method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. no entry is required, select "No Entry" for the account titles and enter for the amounts. Do not round Intermediate calculations. Round answers to decimal places, e.g. 5,27 Debit Credit No. Account Titles and Explanation Machine 1 1 No. Account Titles and Explanation Machine #1 Debit Credit 1 (To record depreciation expense on machinery) 2. (To adjust the Machinery account to fair value) Machine #2 1. (To record depreciation expense on machinery) 2. (To record depreciation expense on machinery) 2 I (To adjust the Machinery account to fair value) Prepare a continuity schedule showing for each machine the amounts recorded to the Machine account and to the accumulated Depreciation account, as well as indicating the carrying amount for each fiscal year from date of purchase to December 31, 2017, using (1) the asset adjustment method and (2) the proportionate method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round answers to decimal places, e.g. 5,275.) Revaluation Model - Asset Adjustment Method Revaluation Model - Proportionate Method Mach. #1 Accum. Depr. Carrying Amount Mach. 1 Accum. Depr. Carrying Amount Jan. 2, 2014 $ Depreciation Dec 31, 2014 Depreciation Prepare a continuity schedule showing for each machine the amounts recorded to the Machine account and to the accumulated Depreciation account, as well as indicating the carrying amount for each Fiscal year from date of purchase to December 31, 2017, using (1) the asset adjustment method and (2) the proportionate method. (Enter negative amounts using either a negative in preceding the number e.g. -45 or parentheses e... (45). Round answers to o decimal places, e.g. 5,275.) Revaluation Model - Asset Adjustment Method Revaluation Model - Proportionate Method Mach. #1 Accum. Depr. Carrying Amount Mach 1 Accum. Depr. Carrying Amount Jan. 2, 2014 s Depreciation I Dec 31, 2014 Depreciation Unadj. Dec. 2015 Reval. Adjustment Reval. Gain or loss Dec 31, 2015 Deprec. (6 yrs.rem.) Dec 31, 2016 Depreciation Unadj. Dec, 2017 Ver on 4.2.2 Dec 31, 2016 Depreciation Unadj. Dec, 2017 Reval Adjustment Rev. Gain or Loss Reval. Surplus (OCT) Dec 31, 2017 $ Revaluation Model - Asset Adjustment Method Mach. 32 Accum. Depr. Carrying Amount Revaluation Model - Proportionate Method Mach. #2 Accum. Depr. Carrying Amount Jan 2, 2013 $ Depreciation Dec 31, 2013 Depreciation Dec 31, 2014 Depreciation Version 4.24.20 Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc. Revaluation Model - Asset Adjustment Method Mach. 2 Accum. Depr. Carrying Amount Revaluation Model - Proportionate Method Mach 2 Accum. Depr. Carrying Amount Jan. 2. 2013 $ Depreciation Dec 31, 2013 Depreciation Dec 31, 2014 Depreciation Unadj. Dec, 2015 Reval Adjustment Reval. Surplus (OCI) Dec 31, 2016 Deprec. (9.5 yrs. rem.) Dec 31, 2016 Depreciation PRINTER VERSION IS Unadj. Dec. 2015 Reval. Adjustment Reval. Surplus (OCT) Dec 31, 2016 Deprec. (9.5 yrs. rem.) Dec 31, 2016 Depreciation Unadj. Dec, 2017 Reval. Adjustment Reval. Surplus (OCI) Rev. Gain or Loss Dec. 31, 2017 $ $

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