Question
On 30 June 2019, Swan Ltd acquired a machine for $180 000 cash, with an expected useful life of 9 years and a zero residual
On 30 June 2019, Swan Ltd acquired a machine for $180 000 cash, with an expected useful life of 9 years and a zero residual value. The company has adopted fair value for the valuation of non-current assets.
On 30 June 2020, the company hired an independent valuer who assessed the value of the machine to be $175 000 with a remaining useful life of 8 years and residual value of $5 000.
On 30 June 2021, the fair value of the machine is $122 000 with a remaining useful life of 6 years and zero residual value.
The company uses straight-line depreciation method for depreciating all its property, plant and equipment. Income tax rate is 30%. The financial year ends on 30 June.
Required
Prepare all the necessary journal entries related to the machine from 30 June 2019 to 30 June 2021.
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