Question 1

1. On 1 July 2021 Sheldon Ltd purchased a new machine at a cost of $820,000 for cash. The asset had an estimated useful life of 10 years, a nil residual value and was depreciated on a straight line basis.

   The Fair Value amounts of the asset for the next 4 years are as follows:

   30 June 2022 $830,000

   30 June 2023 $850,000

   30 June 2024 $860,000

   Due to the nature of the machine, the company decides to revalue the asset in accordance with the market values at the 30 June each year. No revaluation is done for 30 June 2025.

   Required (answer both parts of the question):

   (i) Record the acquisition of the machine on 1 July 2021. Narrations are not required.

   (1 mark)

   (ii) Record the required transactions for 30 June 2023. Include calculations in brackets. Round calculations to the nearest whole dollar. Narrations are not required.

Question 2

1. The machine from Question 1 was sold on 31 March 2025 for $750,000.

   Required:

   Record the required transactions for 31 March 2025. Include calculations in brackets. Round calculations to the nearest whole dollar. Assume there is no asset revaluation surplus. Narrations are not required.