3 Tiroo Ltd has the following land and buildings in its financial statements as at 30 June 2023: Residential land, at cost Buildings, at valuation 2020 Accumulated depreciation Amount $ $1,500,000 $1,200,000 ($150,000) On 30 June 2023, the balance of the revaluation surplus is $100,000 credit, which is related to the buildings. Independent valuations of the land and buildings are obtained on this exact date. In relation to the above assets, the assessed fair values on 30 June 2023 are: Residential land, previously recorded at cost Buildings, previously revalued in 2020 Amount $ $1,650,000 $900,000 Required: Provide the journal entries to account for the revaluation of Tiroo Ltd's non-current assets for the year ended 30 June 2023, in accordance with AASB 116. Round double entries to a full dollar. Narrations are not needed and you are not required to use all the available rows.
3 Tiroo Ltd has the following land and buildings in its financial statements as at 30 June 2023: Residential land, at cost Buildings, at valuation 2020 Accumulated depreciation Amount $ $1,500,000 $1,200,000 ($150,000) On 30 June 2023, the balance of the revaluation surplus is $100,000 credit, which is related to the buildings. Independent valuations of the land and buildings are obtained on this exact date. In relation to the above assets, the assessed fair values on 30 June 2023 are: Residential land, previously recorded at cost Buildings, previously revalued in 2020 Amount $ $1,650,000 $900,000 Required: Provide the journal entries to account for the revaluation of Tiroo Ltd's non-current assets for the year ended 30 June 2023, in accordance with AASB 116. Round double entries to a full dollar. Narrations are not needed and you are not required to use all the available rows.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Tiroo Ltd has the following land and buildings in its financial statements as at 30
June 2023:
Residential land, at cost
Buildings, at valuation 2020
Accumulated depreciation
On 30 June 2023, the balance of the revaluation surplus is $100,000 credit, which is
related to the buildings. Independent valuations of the land and buildings are
obtained on this exact date. In relation to the above assets, the assessed fair values
on 30 June 2023 are:
Residential land, previously recorded at cost
Buildings, previously revalued in 2020
Amount $
$1,500,000
$1,200,000
($150,000)
Required:
Amount $
$1,650,000
$900,000
Provide the journal entries to account for the revaluation of Tiroo Ltd's non-current
assets for the year ended 30 June 2023, in accordance with AASB 116. Round
double entries to a full dollar. Narrations are not needed and you are not required to
use all the available rows.
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