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1. Calculate the revaluation gain on 31 Dec, Year 1 and prepare appropriate jounrnal entries. 2. Determine whether the equipment has been impaired in accordance
1. Calculate the revaluation gain on 31 Dec, Year 1 and prepare appropriate jounrnal entries.
26. Kiely has a machine that cost $100,000 with accumulated depreciation of $60,000 on Dec 31 , Year 1. On that date, Kiely determines that the market value for these buildings is $50,000. Kiely wishes to use revaluation method to report buildings. Remaining useful life of the machine on Dec 31 , Year 1 is 5 years. On Dec 31 , Year 3 , due to the change in technological environment, the machine is tested for impairment. In accordance with the test. the following information has been identified: - Selling price: $28,000 - Costs of disposal: $1,000 - Expected future cash flows: $32,000 - Present value of expected future cash flows: $29,000 Required: A, Calculate the revaluation gain on 31 Dec, Year 1 and prepare appropriate journal entries. B. Determine whether the equipment has been impaired in accordance with IFRS 36 and prepare appropriate journal entries (if any) on 31 Dec, Year 3 2. Determine whether the equipment has been impaired in accordance with IFRS 36 and prepare appropriate journal entries (if any) on 31 Dec, Year 3.
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