I'm just confused how they worked out these solutions (I posted them below), since there's no dates nor notes with each entry and the working isn't shown too. I was curious if you know how they did it

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1. In the 30 June 2018 annual report of Baker and Anderson Ltd, the equipment was reported as follows:

Equipment $650,000

Accumulated depreciation ($280,000) $370,000

The equipment consisted of two machines, Machine X and Machine Y. Both machines are measured using the cost model and depreciated on a straight-line basis over a 10-year period. As at 30 June 2018, these machines were reported as follows:

Machine X Cost $380,000

Carrying amount $190,000

Machine Y Cost $270,000

Carrying amount $180,000

On 31 December 2018, the directors of Baker and Anderson Ltd decided to change the basis of measuring equipment from the cost model to fair value model. Machine X was revalued to $200,000 with an expected useful life of 6 years, and Machine Y was revalued to $160,000 with an expected useful life of 5 years.

On 1 July 2019, Machine X was assessed to have a fair value of $175,000 with an expected useful life of 5 years, and Machine Ys fair value was $143,000 with an expected useful life of 4 years.

1. Prepare the revaluation journal entries for both Machines X and Y required for the event on 1 July 2019 (5 journal entries required). Show all workings.

Solution

Machine X:

1. Dr Accumulated Dep 16 667

Cr Machine X 16 667

2. Dr Loss on Revaluation (OCI) 8 333

Cr Machine x 8 333

3. Dr Asset Revaluation Surplus 8 333

Cr Loss on Revaluation (OCI) 8 333

Machine Y:

1. Dr Accumulated depreciation 16 000

Cr Machine Y 16 000

2. Dr Loss on Revaluation (P&L) 1 000

Cr Machine Y 1 0 00