On 1 July 2016, Liala Itd sold an item of plant to Jordan Ltd Ltd for $150,000 when its carrying value in Liala Ltd book was $200,000 (costs $300,000, accumulated depreciation $100,000). This plant has a remaining useful life of five (5) years form the date of sale. The group measures its property plants and equipment using a costs model. Tax rate is 30 percent. Required: Prepare the necessary journal entries in 30 June 2017 to eliminate the intra-group transfer of equipment.

On 1 July 2016, Liala Itd sold an item of plant to Jordan Ltd Ltd for $150,000 when its carrying value in Liala Ltd book was $200,000 (costs $300,000, accumulated depreciation $100,000). This plant has a remaining useful life of five (5) years form the date of sale. The group measures its property plants and equipment using a costs model. Tax rate is 30 percent. Required: Prepare the necessary journal entries in 30 June 2017 to eliminate the intra-group transfer of equipment.

Name: On 1 July 2016, Liala itd sold an item of plant toJordan Ltd Ltd for
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Description: On 1 July 2016, Liala itd sold an item of plant toJordan Ltd Ltd for $150,000 when its carryingvalue in Liala Ltd book was $200,000 (costs$300,000, accumulated depreciation $100,000).This plant has a remaining useful life of five (5)years form the d

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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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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On 1 July 2016, Liala itd sold an item of plant to
Jordan Ltd Ltd for $150,000 when its carrying
value in Liala Ltd book was $200,000 (costs
$300,000, accumulated depreciation $100,000).
This plant has a remaining useful life of five (5)
years form the date of sale. The group measures
its property plants and equipment using a costs
model. Tax rate is 30 percent.
Required:
Prepare the necessary journal entries in 30 June
2017 to eliminate the intra-group transfer of
equipment.

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) On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000 when its’ carrying value in Liala Ltd book was $600000 (costs $900000, accumulated depreciation $300000). This plant has a remaining useful life of five (5) years form the date of sale. The group measures its property plants and equipment using a costs model. Tax rate is 30 percent. Please answer the below :1: Pass the necessary entries on 30 June 2017 and 30 June 2018 to eliminate the intra-group transfer of equipment.