Question1:
Mandurah Ltd purchased equipment on 1 July 2011 for $39,800 cash. Transport and installation costs of $4200 were paid on 5 July 2011. Useful life and residual value were estimated to be 5 years and $1 200 respectively. Mandurah depreciates equipment using the straight-line method to the nearest month and reports annually on 30 June. The company tax rate is 30%.
On 30 June 2013, the company adopted the revaluation model to account for equipment. An expert valuation was obtained showing that the equipment had a fair value of $30,000 at that date, with a remaining useful life of 3 years and a residual value of $1 200.
On 30 June 2014, depreciation for the year was charged and the equipment's carrying amount was remeasured to its fair value of $18 000, with a remaining useful life of 2 years and a residual value of $1200.
On 30 September 2014, the equipment was sold for $10 200 cash.
Required:
(Show all workings and round amounts to the nearest dollar)
Prepare the journal entries to record the transactions and events for the period 1 July 2011 to 30 Sep 2014.
Question 2:
X Ltd purchased equipment on 1 July 2011 for $ 39,800. Transport and installation costs of $ 4,200 were paid on 5 July 2011. Useful life and residual value were estimated to be 10 years and $ 1,800 respectively. X Ltd depreciates equipment using the straight-line method to the nearest month, and reports annually on 30 June. The company tax rate is 30%.
In June 2013, changes in technology caused the company to revise the estimated total life from 10 years to 5 years, and the residual value from $ 1,800 to $ 1,200. This revised estimate was made before recording the depreciation for the financial year ended 30 June 2013.
On 30 June 2013, the company adopted the revaluation model to account for equipment. An expert valuation was obtained showing that the equipment had a fair value of $ 30,000 at that date.
On 30 June 2014, depreciation for the year was charged and the equipment's carrying amount was remeasured to its fair value of $ 16,000.
On 30 September 2014, the equipment was sold for $ 8,400 cash.
Required:
Prepare general journal entries to record the transactions and events for the period 1 July 2011 to 30 September 2014.