Problem 31-7 (IAA) On January 1, 2018, Epitome Company acquired the following property, plant and equipment: Land Building Machinery Equipment Cost 5,000,000 25,000,000 10,000,000 3,000,000 Useful life Land Building Machinery Equipment 25 5 10 At the beginning of 2021, a revaluation of property, plant and equipment was made by professionally qualified valuers. While no change in the useful life of the assets was indicated, it was ascertained that replacement cost of the assets had increased by the following percentage: 100% 80% 50% 40% It was authorized that such revaluation be recorded in the accounts and that depreciation be recorded on the basis of revalued amount. Required: a. Prepare journal entry to record the revaluation on January 1, 2021. b. Prepare journal entry to record the depreciation for the current year. c. Prepare journal entry to record the piecemeal realization, of the révaluation surplus. d. Present the assets in the statement of financial position on December 31, 2021.

Problem 31-7 (IAA) On January 1, 2018, Epitome Company acquired the following property, plant and equipment: Land Building Machinery Equipment Cost 5,000,000 25,000,000 10,000,000 3,000,000 Useful life Land Building Machinery Equipment 25 5 10 At the beginning of 2021, a revaluation of property, plant and equipment was made by professionally qualified valuers. While no change in the useful life of the assets was indicated, it was ascertained that replacement cost of the assets had increased by the following percentage: 100% 80% 50% 40% It was authorized that such revaluation be recorded in the accounts and that depreciation be recorded on the basis of revalued amount. Required: a. Prepare journal entry to record the revaluation on January 1, 2021. b. Prepare journal entry to record the depreciation for the current year. c. Prepare journal entry to record the piecemeal realization, of the révaluation surplus. d. Present the assets in the statement of financial position on December 31, 2021.

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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Dont uplode image in answer 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%.