Webb Corporation prepares financial statements in

accordance with IFRS Selected #2115

Webb Corporation prepares financial statements in accordance with IFRS Selected

Webb Corporation prepares financial statements in accordance with IFRS. Selected accounts
included in the property, plant, and equipment section of the company's statement of financial
position at December 31, 2016, had the following balances:

Land ........................................... $ 300,000

Land Improvements ........................... 140,000

Buildings ..................................... 1,100,000

Equipment ...................................... 960,000

During 2017, the following transactions occurred:

1. A tract of land was acquired for $150,000 as a potential future building site.

2. A plant facility consisting of land and a building was acquired from Knorman Corp. for use in
production in exchange for 20,000 of Webb's common shares. The most recent sale of Webb's
common shares took place last month, when 4,000 of Webb's common shares sold for $57 per
share. The plant facility was carried on Knorman's books at $110,000 for land and $320,000 for
the building at the exchange date. At the exchange date, a reliable, independent valuator
determined the fair value of the land and building to be $230,000 and $690,000, respectively.

3. Equipment was purchased for a total cost of $400,000. Additional costs incurred were as
follows:

Freight and unloading ...................... $13,000

Provincial sales taxes ....................... 28,000

GST (recoverable) ........................... 20,000

Installation ................................... 26,000

4. Expenditures totalling $95,000 were made for new parking lots, streets, and sidewalks at the
corporation's various plant locations. These expenditures had an estimated useful life of 15
years.

5. A piece of equipment that cost $80,000 on January 1, 2009, was scrapped on June 30, 2017.
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 Double-declining- balance depreciation had been recorded based on a 10-year life.

6. A piece of equipment was sold for $20,000 on July 1, 2017. Its original cost was $44,000 on
January 1, 2014, and it was depreciated on the straight-line basis over an estimated useful life
of seven years, assuming a residual value of $2,000.

Instructions

(a) Prepare a detailed analysis of the changes in each of the following statement of financial
position accounts for 2017: Land, Land Improvements, Buildings, and Machinery and
Equipment.

(b) List the items in the transactions above that were not used to determine the answer to (a),
and show the relevant amounts and supporting calculations in good form for each item. In
addition, indicate where, or if, these items should be included in Webb's financial statements.

(c) How will the land in item 1 be accounted for when it is used as a building site?

Webb Corporation prepares financial statements in accordance with IFRS Selected

ANSWER
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