Accounting Answer asap Group Ccc-Three Ltd has identified its non-current assets consist of three classes: goodwill, land and plant. Details of items included in each class appear below. Goodwill Total goodwill is $580,000 and no impairments have previously been recorded. $300,000 of this total relates to the purchase of Company F on 1 February 2020. The estimated fair value of this goodwill at 30 June 2021 is $350,000. The remaining $280,000 of the total goodwill relates to the purchase of Company G on 1 January 2021. The estimated recoverable amount of this goodwill at 30 June 2021 is $250,000. Land The land was acquired on 1 June 2016 for $2,100,000. The estimated market value of the land at 30 June 2021 is $2,600,000. However, if the land was sold, disposal costs of $90,000 would be incurred. Plant The plant was originally acquired for $270,000 on 1 September 2017. When purchased, the plant was considered to have a nil residual value and a 10-year useful life for both accounting and tax purposes. The estimated market value of the plant on 30 June 2021 is $250,000. Group Three Ltd’s policy to date has been to apply the cost model and depreciate assets on a straight-line basis. A change of policy has been proposed, to commence on 30 June 2021, whereby the revaluation model would be adopted. However, there has been no proposed change to the method of depreciation, useful lives of assets, or residual values. The applicable tax rate is 30%. Required: 1. Prepare journal entries for any necessary revaluations at 30 June 2021
Accounting
Answer asap
Group Ccc-Three Ltd has identified its non-current assets consist of three classes:
Goodwill
Total goodwill is $580,000 and no impairments have previously been recorded. $300,000 of this total relates to the purchase of Company F on 1 February 2020. The estimated fair value of this goodwill at 30 June 2021 is $350,000. The remaining $280,000 of the total goodwill relates to the purchase of Company G on 1 January 2021. The estimated recoverable amount of this goodwill at 30 June 2021 is $250,000.
Land
The land was acquired on 1 June 2016 for $2,100,000. The estimated market value of the land at 30 June 2021 is $2,600,000. However, if the land was sold, disposal costs of $90,000 would be incurred.
Plant
The plant was originally acquired for $270,000 on 1 September 2017. When purchased, the plant was considered to have a nil residual value and a 10-year useful life for both accounting and tax purposes.
The estimated market value of the plant on 30 June 2021 is $250,000.
Group Three Ltd’s policy to date has been to apply the cost model and depreciate assets on a straight-line basis. A change of policy has been proposed, to commence on 30 June 2021, whereby the revaluation model would be adopted. However, there has been no proposed change to the method of
The applicable tax rate is 30%. Required:
1. Prepare
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
