Burgundy Limited purchased a plant on 2 January 20X1 for C80 000. The plant is measured under the revaluation model, using the net replacement value method, and is depreciated on the straight-line basis, over its estimated economic useful life of 5 years, to a nil residual value. The following fair values were measured by an independent valuer using the cost approach (often called the current replacement cost): Date Fair value 01 January 20X2 C96 000 01 January 20X3 C40 000 01 January 20X4 C40 000 Burgundy transfers a portion of the revaluation surplus to retained earnings on an annual basis. There were no indications of impairment at the end of any of the years. Required: Show all related journal entries for the years ended 31 December 20X2, 20X3 and 20X4. Ignore tax.
Burgundy Limited purchased a plant on 2 January 20X1 for C80 000. The plant is measured under the revaluation model, using the net replacement value method, and is depreciated on the straight-line basis, over its estimated economic useful life of 5 years, to a nil residual value. The following fair values were measured by an independent valuer using the cost approach (often called the current replacement cost): Date Fair value 01 January 20X2 C96 000 01 January 20X3 C40 000 01 January 20X4 C40 000 Burgundy transfers a portion of the revaluation surplus to retained earnings on an annual basis. There were no indications of impairment at the end of any of the years. Required: Show all related journal entries for the years ended 31 December 20X2, 20X3 and 20X4. Ignore tax.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Burgundy Limited purchased a plant on 2 January 20X1 for C80 000. The plant is measured under the
revaluation model, using the net replacement value method, and is depreciated on the straight-line
basis, over its estimated economic useful life of 5 years, to a nil residual value.
The following fair values were measured by an independent valuer using the cost approach (often called
the current replacement cost):
Date
Fair value
01 January 20X2
C96 000
01 January 20X3
C40 000
01 January 20X4
C40 000
Burgundy transfers a portion of the revaluation surplus to retained earnings on an annual basis.
There were no indications of impairment at the end of any of the years.
Required:
Show all related journal entries for the years ended 31 December 20X2, 20X3 and 20X4.
Ignore tax.
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