Erase Ltd adopts the revaluation model for measuring equipment. In the previous year’s revaluation (30 June 2021), equipment A was decreased by $5,000 to bring it to a fair value of $80,000. Equipment A had a remaining useful life of 5 years and a residual value of $2,000 after this revaluation. On 30 June 2022, and prior to recording depreciation for the year, Erase Ltd obtained a fair value for equipment A at $75,000. The company uses straight-line depreciation, the reporting period ends 30 June, and the tax rate is 30%. Required: Prepare all necessary journal entries for equipment A on 30 June 2022. Show all calculations.
Erase Ltd adopts the revaluation model for measuring equipment. In the previous year’s revaluation (30 June 2021), equipment A was decreased by $5,000 to bring it to a fair value of $80,000. Equipment A had a remaining useful life of 5 years and a residual value of $2,000 after this revaluation. On 30 June 2022, and prior to recording depreciation for the year, Erase Ltd obtained a fair value for equipment A at $75,000. The company uses straight-line depreciation, the reporting period ends 30 June, and the tax rate is 30%. Required: Prepare all necessary journal entries for equipment A on 30 June 2022. Show all calculations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Erase Ltd adopts the revaluation model for measuring equipment.
In the previous year’s revaluation (30 June 2021), equipment A was decreased by $5,000 to bring it to a fair value of $80,000. Equipment A had a remaining useful life of 5 years and a residual value of $2,000 after this revaluation.
On 30 June 2022, and prior to recording
The company uses straight-line depreciation, the reporting period ends 30 June, and the tax rate is 30%.
Required:
Prepare all necessary
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