Accounting

QUESTION 4 Total 26 Marks On 1 July 20X5, Palmavite Ltd acquired two Machines within the same class of Plant and Equipment. These were paid for in cash. Information on these assets is as follows: Cost Expected useful life Residual Value Machine Blue $450,000 5 years $70,000 Machine Green $360,000 4 years $40,000 The Machines are expected to generate benefits evenly over their useful lives (ie straight-line depreciation). The class of plant and equipment is measured at fair value using the revaluation model specified in AASB116 Property Plant and Equipment. At 30 June 20X6, information about the assets is as follows: Fair value Expected useful life Residual Value Machine Blue $360,000 6 years $60,000 Machine Green $300,000 4 years $40,000 On 1 January 20X7, Machine Green was sold for $275,000 cash and not replaced. On 30 June 20X7, information on the remaining Machine is as follows: Fair value Expected useful life Residual Value Machine Blue $350,000 $50,000 3 years Required Prepare the general journal entries in the records of Palamvite Ltd to record all the described events over the period 1 July 20X5 to 30 June 20X8 (inclusive), assuming the reporting periods end on 30th June. Round numbers to the nearest dollar. Ignore GST. Narrations are not required. 26 marks Date Accounts DR CR