Accumulated Depreciation Question Description Discussion 

Accumulated Depreciation Question Description Discussion

Answer: 13 September 20X1: Accumulated depreciation – Building 8,000,000 Building 8,000,000 [to offset the accumulated depreciation against the building’s cost] 15 September 20X1: Loss on asset held for sale 2,000,000 Building 2,000,000 [to write down the building to its estimated fair value of $10 million] 24 September 20X1: Loss on asset held for sale ­ 600,000 Building 600,000 [to write down the building by the estimated amount of contingent commission] Building held for sale (current asset) 9,400,000 Building 9,400,000 [to reclassify as current] 31 December 20X1: Loss on asset held for sale 1,410,000 Building held for sale 1,410,000 [further write-down from $9.4 million to revaluation of $7.99 million, net of 6% commission] 31 March 20X2: Building held for sale 2,010,000 Gain (recovery) on asset held for sale 2,010,000 [to record the increase in estimated fair value, up to the restore previous book value of $10 million] 27 April 20X2: Receivable from sale of building 10,998,000 Building held for sale 10,000,000 Gain on disposal of building held for sale 998,000 [to record sale at $11.7 million, less 6% commission of $702,000] 1

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