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changed since their purchase. Required: Prepare the relevant journal entries from 15 July 2023 until the end of the financial year.

changed since their purchase. Required: Prepare the relevant journal entries from 15 July 2023 until the end of the financial year.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Madalena Ltd. purchased three machines on 15 July 2023 on credit. The bank asked for a yearly interest payment of 5%. In this purchase, GST of 10% is included. Machines A, B and C cost 35%, 40% and 25% of the total amount of $ 200,000. These machines are depreciated using a straight-line method and their useful lives are 10, 12 and 14 years, respectively. Soon after the purchase, Madalena Ltd. decided to keep these machines under the revaluation model. On that date, Madalena Ltd. received the following information about the fair values: Machine A: 65000 Machine B: 95000 Machine C: 50000 Some months later, the fair values of these machines changed, these were collected on 31 Oct-23: Machine A: 58000 Machine B: 80000 Machine C: 38000 Before the end of the financial year, these are the new fair values: Machine A: 45000 Machine B: 101000 Machine C: 44000 Note that the useful lives of these assets have not changed since their purchase. Required: Prepare the relevant journal entries from 15 July 2023 until the end of the financial year.
Transcribed Image Text:Madalena Ltd. purchased three machines on 15 July 2023 on credit. The bank asked for a yearly interest payment of 5%. In this purchase, GST of 10% is included. Machines A, B and C cost 35%, 40% and 25% of the total amount of $ 200,000. These machines are depreciated using a straight-line method and their useful lives are 10, 12 and 14 years, respectively. Soon after the purchase, Madalena Ltd. decided to keep these machines under the revaluation model. On that date, Madalena Ltd. received the following information about the fair values: Machine A: 65000 Machine B: 95000 Machine C: 50000 Some months later, the fair values of these machines changed, these were collected on 31 Oct-23: Machine A: 58000 Machine B: 80000 Machine C: 38000 Before the end of the financial year, these are the new fair values: Machine A: 45000 Machine B: 101000 Machine C: 44000 Note that the useful lives of these assets have not changed since their purchase. Required: Prepare the relevant journal entries from 15 July 2023 until the end of the financial year.
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