Dextor Ltd provided you with information regarding two of their property, plant and equipment $($PPE$)$ items:

Machine X Machine Z

Date of purchase $1/4/20201/4/2020$

Cash purchase cost $$86000$ $$46700$

Estimated economic life $10$ years $10$ years

Depreciation method Straight line Straight line

Residual value Nil Nil

Note: You must provide details of where the revaluation gain$/$loss will be shown in the Statement of Comprehensive Income $($SCI$)$ and which equity account the gain$/$loss will be closed off to i$.$e$.,$ P or L$/$REs or OCI$/$ARS$.$

 

 

Required for Machine X:

$($i$)$ On $31$ March $2022,$ Dextor Ltd changed to the revaluation model for its machinery. Machine X$$s fair value $($FV$)$ on $31$ March $2022$ was $$80000.$ Prepare the journal entries on $31$ March $2022$ to record the first revaluation. Show all your workings within the journal entries.

$($ii$)$ Prepare extracts from the financial statements for Dextor Ltd in relation to Machine X for the years ended $31$ March $2021$ and $31$ March $2022.$

$($iii$)$ On $31$ March $2023,$ it was assessed that Machine X had a fair value of $$42,000.$ Prepare the journal entries on $31$ March $2023$ to record the second revaluation. Show all your workings within the journal entries.

$($iv$)$ Machine X was sold for $$34000$ cash on $31$ December $2024.$ Prepare the necessary journal entries to record the derecognition.

$($v$)$ Prepare extracts from the financial statements for Dextor Ltd in relation to Machine X for the years ended $31$ March $2023$ and $31$ March $2024.$

Answer rating: 100% (QA)

i Journal entries on 31 March 2022 to record the first revaluation Debit Machinery Revaluation Reserve 74000 Credit Accumulated Depreciation Machine X ... View the full answer