Question

Kookaburra Ltd used the cost model to measure its machine. Machine Z had cost of $80 000 and had a carrying amount of $70 000 at 30 June 2020 and is depreciated on a straight-line basis over a 10-year period.

On 31 December 2020, the directors of Kookaburra Ltd decided to change the basis of measuring the equipment from the cost model to the revaluation model. Machine Z was revalued to $70 000 with an expected useful life of 8 years.

REQUIRED

Provide the numbers for the journal entries in the blanks below for Machine Z on 31 December 2020 and on 30 June 2021. Complete the four blanks. (You don't need to provide the numbers for "??")

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31 December 2020

a)

            Depreciation expense – Machine Z                          Dr   

                     Accumulated depreciation – Machine Z          Cr                                       

b)

            Accumulated depreciation – Machine Z                   Dr   

                     Machine Z                                                        Cr                                       

c)

            Machine Z                                                                 Dr    

                     Gain on revaluation – Machine Z (OCI)         Cr                                       

            Gain on revaluation – Machine Z (OCI)                  Dr ??

                     Asset revaluation surplus – Machine Z           Cr ??   

30 June 2021

d)

            Depreciation expense – Machine Z                          Dr   

                     Accumulated depreciation – Machine Z          Cr                                       

Answer 1

Hi there,

here's my answer to the question.

The following journal entries with figures as follows :

Tournal Entry Debit($) Credit (&) 4000 4000 st. 31 Dec 2020 .;- (a) Depreciation Expense - Machine z z To Depreciation ciation - Machine z Acumulated Deprecio hon- machine To machine Accumulated (6) Z Dr. 4000 4000 Z (C) Machine z Dr. 4000 To Gain on Revaluation - machingz (OCT) [ 70000 - 660007 4000 th 30 June 2021 machinez Dr 4375 4375 (d) tion - machine z Depreciation Expense- To Accumulated Deprecio bion -