Question
QUESTION 1. In the 30 June 2016 annual report of Cornet Ltd, the machinery was reported...
QUESTION 1.
In the 30 June 2016 annual report of Cornet Ltd, the machinery was reported as follows:
|
Machinery (at cost) |
$310,000 |
|
Accumulated depreciation |
($130,000) |
|
$180,000 |
The machinery is measured using the cost model and is depreciated on a straight-line basis over a 10-year period. The residual value is zero.
On 31 December 2016, the directors of Cornet Ltd decided to change the basis of measuring the equipment from the Cost model to the Revaluation model. The machine was revalued to $180,000 with an expected useful life of 6 years.
At 30 June 2017, the machinery was assessed to have a fair value of $163,000 with an expected useful life of 5 years.
Required:
Prepare the journal entries during the period 1 July 2016 to 30 June 2018 in relation to the machinery.
Homework Answers
Answer #1
Not the answer you're looking for?
Similar Questions
On 1 July 2017, Blenheim Ltd purchased an item of machinery for $280,000. On this date...
On 1 July 2017, Blenheim Ltd purchased an item of machinery for
$280,000. On this date it was estimated that the item of machinery
had a useful life of seven years and zero residual value. Blenheim
Ltd uses the cost model to measure items of property, plant and
equipment and the straight-line method of depreciation. Blenheim
Ltd has a 30 June reporting date.
In relation to the item of machinery, Blenheim Ltd has
identified indicators of impairment for the reporting...
On 1 July 2017, Blenheim Ltd purchased an item of machinery for $280,000. On this date...
On 1 July 2017, Blenheim Ltd purchased an item of machinery for
$280,000. On this date it was estimated that the item of machinery
had a useful life of seven years and zero residual value. Blenheim
Ltd uses the cost model to measure items of property, plant and
equipment and the straight-line method of depreciation. Blenheim
Ltd has a 30 June reporting date.
In relation to the item of machinery, Blenheim Ltd has
identified indicators of impairment for the reporting...
On 30 June 2017, an item of machinery had a carrying amount of $420,000 (current depreciation...
On 30 June 2017, an item of machinery had a carrying amount of
$420,000 (current depreciation for the year has been provided).
The machinery’s cost at acquisition was $600,000 at which time
its estimated useful life was 10 years with no residual value.
On 30 June 2017, the same item of machinery was assessed as
having a recoverable amount of $350,000 with a remaining useful
life of 7 years.
On 30 June 2020, the machinery was assessed as having a...
Max Ltd. purchased a building on 1 July 2018 for $200,000. The useful life of the...
Max Ltd. purchased a building on 1 July 2018 for $200,000. The
useful life of the building was 20 years. After recognition as an
asset, the company can choose either the cost model or the
revaluation model as its accounting policy for measuring property,
plant and equipment. On 30 June 2020, the fair value of the
building was assessed as $240,000 by an independent valuer.
Required:
Prepare an extract of the Statement of Financial Position of Max
Ltd. as at...
At 30 June 2015, the financial statements of McMaster Ltd showed a building with a cost...
At 30 June 2015, the financial statements of McMaster Ltd showed
a building with a cost (net of GST) of $324,000 and accumulated
depreciation of $164,000. The business uses the straight-line
method to depreciate the building. When acquired, the building's
useful life was estimated at 30 years and its residual value at
$65,000. On 1 January 2016, McMaster Ltd made structural
improvements to the building costing $102,000 (net of GST).
Although the capacity of the building was unchanged, it is...
Problem Two: Ignore GST. Assume annual accounting periods ending on June 30. On January 1, 2014,...
Problem Two:
Ignore GST. Assume annual accounting periods ending on June 30.
On January 1, 2014, Malkin Ltd bought a building for $3,000,000;
its useful life was 30 years, its residual value nil, and the
straight-line method would be used for depreciation. The cost model
was adopted. On June 30, 2016, Malkin Ltd decided to adopt the
revaluation model for its building.
Required:
Calculate the book values of the building on June 30, 2014, June
30, 2015, and June 30,...
On 30 June 2018, the Statement of Financial Position of Topaz Ltd showed the following non-current...
On 30 June 2018, the Statement of Financial Position of Topaz
Ltd showed the following non-current asset after charging
depreciation:
Equipment 550,000
Accumulated Depreciation (350,000)
200,000
As of 30 June 2018, the company decided to adopt the revaluation
method for equipment. Therefore, on 30 June 2018, an independent
valuer assessed the fair value of the equipment to be $220,000 with
a remaining useful life of 5 years. On 30 June 2019, the equipment
was revalued again to its fair value...
Happy owns a building, which was purchased at a cost of $1,000,000 on 30 June 2018...
Happy owns a building, which was purchased at a cost of
$1,000,000 on 30 June 2018 (8 years useful life and no residual
value). Happy is carrying the building at fair value. On 30 June
2019 (for the first time after purchase), the building is assessed
as having a fair value equal to $1,200,000 and is revalued by
Happy.
a) Provide the journal entries to account for the revaluation on
30 June 2019, showing all necessary workings and calculations ....
‘X’ Ltd. purchased two new machines for cash on 1 January 2018. Machine A cost $4000...
‘X’ Ltd. purchased two new machines for cash on 1 January 2018.
Machine A cost $4000 and Machine B cost $10000. Each machine was
expected to have a useful life of 10 years, and residual values
were estimated at $200 for Machine A and $500 for Machine B.
On 30 June 2019, ‘X’ Ltd. adopted the revaluation model to
account for the class of machinery. The fair values of Machine A
and Machine B were determined to be $3200 and...
Question 3 - Week 3 (11 marks) TAKULAH Traders Ltd purchased a machine for $650 000...
Question 3 - Week 3 TAKULAH Traders Ltd purchased a
machine for $650 000 and there was an accumulated depreciation
balance of $110 000 at 30 June 2022. Its fair value is assessed at
this time, with its first revaluation as $450 000. The machine’s
useful life is expected to be 5 more years and the residual value
to be $50 000. On 1 July 2023 the asset’s fair value is $460 000
and the residual value and useful life...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 5 minutes ago
asked 9 minutes ago
asked 18 minutes ago
asked 22 minutes ago
asked 43 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 2 hours ago
asked 2 hours ago
asked 2 hours ago
asked 2 hours ago
asked 2 hours ago