At 1 July 2019 David Ltd acquired the following non-current assets: Machine A Machine B Machine C Cost 48,000 Cost 70,000 Cost 85,000 Useful Life 8 years Useful Life 8 years Useful Life 10 years The firm uses the valuation model for all three assets At 30 June 2020, the fair values of all assets were assessed. Machine A had a fair value of $45,000, and Machine B a fair value of $58,000. The remaining useful lives were assessed to be 5 years for Machine A and 4 years for Machine B. At this time the value of Machine C was unchanged. At 30 June 2021, Machine C was sold for a consideration of $75,000. On the same date the fair values of Machine A and Machine B were reassessed. Machine A had a fair value of $32,000 and Machine B a fair value of $54,000. Required: Prepare the journal entries for David Ltd for the years ending 30 June 2020 and 2021. Assume a tax rate of 30%.
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At 1 July 2019 David Ltd acquired the following non-current assets:
|
Machine A |
Machine B |
Machine C |
|
Cost 48,000 |
Cost 70,000 |
Cost 85,000 |
|
Useful Life 8 years |
Useful Life 8 years |
Useful Life 10 years |
The firm uses the valuation model for all three assets
At 30 June 2020, the fair values of all assets were assessed. Machine A had a fair value of $45,000, and Machine B a fair value of $58,000. The remaining useful lives were assessed to be 5 years for Machine A and 4 years for Machine B. At this time the value of Machine C was unchanged.
At 30 June 2021, Machine C was sold for a consideration of $75,000. On the same date the fair values of Machine A and Machine B were reassessed. Machine A had a fair value of $32,000 and Machine B a fair value of $54,000.
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