Adelaide Ltd purchased a machine on 1 July 2020.The machine cost $90,000, shipping costs were...
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Adelaide Ltd purchased a machine on 1 July 2020.The machine cost $90,000, shipping costs were $15,000 and installation costs were$5,000. The machine will be depreciated using the reducing balance method at a rate of 30%.The useful life will be 10 years with an expected residual value of $25,000. On 1 July 2022 the equipment was revalued to $50,000. Adelaide Ltd has a 30 June year end
Required: (i) As a result of the purchase of this new machine, an old machine with a cost of $60,000, accumulated depreciation of$55,000 was sold at aloss of $2000.Prepare the journal entry for this disposal of the old machine. [2 marks] (ii) What is the net book value ofthe new machine as at 30 June 2022? Show workings including the cost of the asset and the accumulated depreciation. [3 marks] (iii) Prepare the journal entries to account for the revaluation on 1 July 2022 (the company uses the revaluation model). [3 marks]
Note: Dates and narrations not required
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