Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1 st July 2014, Anna Ltd purchased a machine A at the price of $110,000. Revaluation model is applied for the subsequent measurement. Revaluation is

1st July 2014, Anna Ltd purchased a machine A at the price of $110,000. Revaluation model is applied for the subsequent measurement. Revaluation is done at the end of each year. Straight line method was used for depreciation over 10 years. Residual value was estimated to be $10,000. Assuming the depreciation method, estimation of useful life and residual value are not changed by revaluation. On 30th June 2015, fair value of the machine A is $109,000. On 30th June, 2016, the fair value of the machine equals to its carrying amount. In August 2016, new generation of machine with more advanced technology and higher product quality became available. On 30 June 2017, the fair value of machine A is estimated to be 80,000 and the cost of disposal of 5,000 and value-in-use is 51,000. On 31st December 2018, Anna Ltd decided to purchase a new machine B by trading in the machine A. The market price of machine B is $100, 000. The exchanged Machine A is valued at $65,000. Anna Ltd paid the difference in cash. Ignore taxes.

Required:

Journal entries needed for 30th June 2015, 30th June 2017 and 31st December 2018.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Audit Cultures Anthropological Studies In Accountability Ethics And The Academy

Authors: Marilyn Strathern

1st Edition

0415233275, 978-0415233279

More Books

Students also viewed these Accounting questions

Question

Prepare for a successful job interview.

Answered: 1 week ago

Question

Describe barriers to effective listening.

Answered: 1 week ago

Question

List the guidelines for effective listening.

Answered: 1 week ago