Machine A Machine B Machine C Cost 48,000 Useful Life 8 years Cost 70,000 Useful Life 8 years Cost 85,000 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 $50,000, and Machine B a fair value of $60,000. The remaining useful lives were assessed to be 6 years for Machine A and 5 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 $72,000. On the same date the fair values of Machine A and Machine B were reassessed. Machine A had a fair value of $30,000, and Machine B a fair value of $50,000. Required: Prepare the journal entries for Steven Ltd for the years ending 30 June 2020 and 2021. Assume a tax rate of 30%.

Machine A Machine B Machine C Cost 48,000 Useful Life 8 years Cost 70,000 Useful Life 8 years Cost 85,000 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 $50,000, and Machine B a fair value of $60,000. The remaining useful lives were assessed to be 6 years for Machine A and 5 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 $72,000. On the same date the fair values of Machine A and Machine B were reassessed. Machine A had a fair value of $30,000, and Machine B a fair value of $50,000. Required: Prepare the journal entries for Steven Ltd for the years ending 30 June 2020 and 2021. Assume a tax rate of 30%.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles

Section: Chapter Questions

Problem 8.6E

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A. MacPro Property Bhd acquired an investment property on 1 January 2015 and measured it using the cost model. On 1 January 2018, MacPro Property Bhd changed the accounting policy and used the fair value model to measure investment property. The acquisition cost of the property was RM70 million and the estimated useful life was 35 years. The fair values of the property were measured as below: Date RM (in million) 31/12/2015 72 31/12/2016 74 31/12/2017 78 31/12/2018 83 Profit after depreciation on investment property but before tax for 2017 and 2018 were RM80 million and RM95 million, respectively. Retained earnings brought forward on 1 January 2017 and 2018, were RM150 million and RM210 million, respectively. Assume that tax rate for 2017 and 2018 was 25%. REQUIRED: Discuss the accounting treatment of the above transaction in accordance to MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors. Prepare the comparative financial…
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%.
MacPro Property Bhd acquired an investment property on 1 January 2015 and measured it using the cost model. On 1 January 2018, MacPro Property Bhd changed the accounting policy and used the fair value model to measure investment property. The acquisition cost of the property was RM70 million and the estimated useful life was 35 years. The fair values of the property were measured as below: Date RM (in million) 31/12/2015 72 31/12/2016 74 31/12/2017 78 31/12/2018 83 Profit after depreciation on investment property but before tax for 2017 and 2018 were RM80 million and RM95 million, respectively. Retained earnings brought forward on 1 January 2017 and 2018, were RM150 million and RM210 million, respectively. Assume that tax rate for 2017 and 2018 was 25%. REQUIRED: Discuss the accounting treatment of the above transaction in accordance to MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors. Prepare the comparative…
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