Q2 – A company purchased equipment on 1st January 2020 which cost £30,000 with a useful life of 3 years. On 31st October 2020, an update to the equipment meant that a revaluation was completed. The expert valued the equipment at £40,000 and recommended that the useful life from revaluation will be 5 years. (i) What is the journal to process the revaluation on 31st October 2020? (ii) What is the journal to process the depreciation to 31st December 2020 (Round to the nearest £)? (iii) What is the Net Book Value of the equipment on 31st December 2020? Please dont give me handwritten answer thanku
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.
Q2 – A company purchased equipment on 1st January 2020 which cost £30,000 with a useful life of 3 years. On 31st October 2020, an update to the equipment meant that a revaluation was completed. The expert valued the equipment at £40,000 and recommended that the useful life from revaluation will be 5 years.
(i) What is the journal to process the revaluation on 31st October 2020?
(ii) What is the journal to process the
(iii) What is the Net Book Value of the equipment on 31st December 2020?
Please dont give me handwritten answer thanku
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