Question
I GOT THE WRONG ANSWERS ON PRIOR RESPONSE. I AM RE-POSTING THIS QUESTION TO ANYONE WHO CAN HELP PROVIDE BEST ANSWER. THANK YOU. Brambie Manufacturers
I GOT THE WRONG ANSWERS ON PRIOR RESPONSE. I AM RE-POSTING THIS QUESTION TO ANYONE WHO CAN HELP PROVIDE BEST ANSWER. THANK YOU.
Brambie Manufacturers Inc., a publicly listed company, has two machines that are accounted for under the revaluation model. Technology in Brambies industry is fast-changing, causing the fair value of each machine to change significantly approximately every two years. The following information is available:
Machine #1 | Machine #2 | |||||
Acquisition date | Jan. 2, 2014 | June 30, 2013 | ||||
Original cost | $420,000 | $588,000 | ||||
Original estimate of useful life | 8 years | 12 years | ||||
Original estimate of residual value | 0 | 0 | ||||
Pattern of depreciation | Straight-line | Straight-line | ||||
Fair value at Dec. 31, 2015 | 295,000 | 479,500 | ||||
Balance in Machinery account after proportionate method revaluation on Dec. 31, 2015 | 393,333 | 605,685 | ||||
Balance in Accumulated Depreciation account after proportionate method revaluation on Dec. 31, 2015 | 98,333 | 126,185 | ||||
Cumulative balance in (Revaluation Gain or Loss/ Revaluation Surplus (OCI) at Jan. 1, 2017 | (20,000 | ) | 14,000 | |||
Fair value at Dec. 31, 2017 | 243,000 | 300,500 |
Both machines were last revalued on December 31, 2015. Brambie has a December 31 year end.
Prepare the journal entries required for 2017, using the asset adjustment method.
No. Account Titles and Explanation Debit Credit Machine #1 1.Depreciation Expense 52500 Accumulated Depreciation Machinery 52500 (To record depreciation) 2|Machinery 19500 Revaluation Surplus (OCI) 19500 (To adjust depreciation on machinery) 3. Machinery 31206 Accumulated Depreciation - Machinery 11702 Revaluation Surplus (OCI) 19504 (To adjust machinery) (To adjust machinery) Machine #2 ccumulated Depreciation-Machinery 49000 Machinery 49000 (To record depreciation) 2. Machinery 140500 Revaluation Surplus (OCI) 140500 (To adjust depreciation on machinery) 3. Machinery 187337 Accumulated Depreciation Machinery 46834 Revaluation Surplus (OCI) 140503 (To adjust machinery) No. Account Titles and Explanation Debit Credit Machine #1 1.Depreciation Expense 52500 Accumulated Depreciation Machinery 52500 (To record depreciation) 2|Machinery 19500 Revaluation Surplus (OCI) 19500 (To adjust depreciation on machinery) 3. Machinery 31206 Accumulated Depreciation - Machinery 11702 Revaluation Surplus (OCI) 19504 (To adjust machinery) (To adjust machinery) Machine #2 ccumulated Depreciation-Machinery 49000 Machinery 49000 (To record depreciation) 2. Machinery 140500 Revaluation Surplus (OCI) 140500 (To adjust depreciation on machinery) 3. Machinery 187337 Accumulated Depreciation Machinery 46834 Revaluation Surplus (OCI) 140503 (To adjust machinery)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started