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Johnson Limited is a wholesaler of electric scooters. Laura Smith, the owner, has highlighted some accounting issues facing the company. She has contracted you as
Johnson Limited is a wholesaler of electric scooters. Laura Smith, the owner, has highlighted some accounting issues facing the company. She has contracted you as an accounting consultant to address the issues and advise on the appropriate accounting treatment. The following information and issues relate to the financial year ending 30 June 2022. For this problem, you may ignore all taxes and GST. Relevant information follows: Q5: SHOWROOM PROPERTY: Johnson Limited owns its own showroom property. The revaluation model has been adopted and the showroom property has been revalued to $18,000,000 from its original book value of $10,000,000 as at 30 June 2022. This is the first year the revaluation has taken place. Q5(a): What is the required general journal entry to record the showroom property revaluation involving Other Comprehensive Income (OCI)? Label Debit accounts with "Dr" and Credit accounts with "Cr". For example: (Dr) Asset $XXXXX, (Cr) Revenues $XXXXX. Ignore GST & narrations, fill in Q5(b): Explain how the revaluation would affect the Statement of Comprehensive Income for the period ended 30 June 2022? [Q5(b) = 2 marks]
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