Information About the PPE for Jeffery Inc

Essay

Information about the PPE for Jeffery Inc. is provided below. Determine the balance sheet presentation under the cost and fair value model for each year. Ignore the impact of income taxes and assume that a full year depreciation is taken each year using the straight-line method.
$\begin{array}{|l|l|l|l|l|} \hline & \text { Purchase Price } & \begin{array}{l}\hline\text { Fair value at the } \\ \text { end of Year 1 }\end{array} & \begin{array}{l}\text { Fair value at the } \\\text { end of Year } 2\end{array} & \begin{array}{l}\text { Fair value at the } \\\text { end of Year 3 }\end{array} \\\hline \text { Land } & 10 \text { million } & 12 \text { million } & 14 \text { million } & 13 \text { million } \\\hline \text { Building - 20 year } & & & & \\\text { useful life } & 40 \text { million } & 45 \text { million } & 40 \text { million } & 45 \text { million } \\\hline \text { Machinery - 5 year } & & & & \\\text { useful life } & 5 \text { million } & 4.8 \text { million } & 3.5 \text { million } & 2.7 \text { million }\\\hline\end{array}$

$$\begin{array} { | l | l | l | l | } \hline & \text { Year } 1 & \text { Year } 2 & \text { Year } 3 \\\hline \text { Fralance Sheet } & & & \\\hline \text { Land } & & & \\\hline \text { Fuilding } & & & \\\hline \text { Machinery } & & & \\\hline \text { Total Depreciation } & & & \\\hline \text { Net effect on equity } & & & \\\text { for the year } & & & \\\hline\end{array}$$