On 1 July 2018, ABC Ltd purchased and recorded equipment at its cost of acquisition of...

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Accounting

On 1 July 2018, ABC Ltd purchased and recorded equipment at itscost of acquisition of $320 000. The equipment is expected to havea useful life for seven years and an estimated residual value of$10 000. ABC Ltd depreciates the asset using the straight-linemethod. ABC Ltd uses the revaluation model to equipment and recordsaccumulated depreciation using the net method. The reporting periodend of ABC Ltd is 30 June. ABC Ltd revalued the equipment on 30June 2020, when the fair value of the equipment was $250 000. On 1July 2020, the useful life of the equipment is reassessed: it isexpected to have a remaining useful life of 6 years. The estimatedresidual value remains unchanged. ABC Ltd revalued the equipment on30 June 2021, when the fair value of the equipment was $180 000. On30 June 2022 the equipment was sold for $200 000
REQUIRED: (1) Prepare journal entries to account for therevaluation of the equipment of 30 June 2020. Show all workingsteps. (2) Prepare journal entries to account for the revaluationof the equipment of 30 June 2021. Show all working steps. (3)Prepare journal entries to account for the sale of the equipment of30 June 2022. Show all working steps

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Requirement 1 Prepare journal entries to account for the revaluation of the equipment of 30 June 2020 Show all working steps Date Account Titles and Explanation Debit Credit June 30 2020 Equipment 18562 Revaluation Surplus 18562 Calculation of Depreciation Cost of Equipment on 1 July 2018 320000 Useful life 7 years Residual value 10000 Depreciation Cost Residual Value Useful See Answer

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