Explain the cost model and the revaluation model

Assignment Help Accounting Basics

Reference no: EM132985093

Question: High Tea Ltd acquired two assets on 1 July 2017, within the same class of machine. On the date of acquisition:

Acquisition Cost Expected useful life Machine A $ 100 000 5 years Machine B 60 000 3 years The machines were expected to generate benefits evenly over their useful lives. The class of machine is measured using fair value.

On 30 June 2018: Fair value Expected useful life Machine A $ 84 000 4 years Machine B 38 000 2 years On 1 January 2019, machine B was sold for $29 000 cash.

On 30 June 2019 Fair value Expected useful life Machine A $ 61 000 3 years The reporting date is 30 June. The income tax rate is 30%.

Required: Prepare the journal entries to record the transactions and events described above. Explain the cost model and the revaluation model.

Reference no: EM132985093

Questions Cloud

Resistance mounted to president clinton : The "don't ask, don't tell" policy of the U.S. military was passed as a compromise when resistance mounted to President Clinton's initial plans to repeal the ba

Mention 6 questions about pay structure : Mention 6 questions about pay structure? (Short Explanation)

Differences in the duties of human service professionals : What are some of the differences in the duties of human service professionals and other professionals in the social services arena in regard to these population

Was the student answer ethical : The student unhesitatingly replies "yes," even though this potential employer actually is her third choice. Was the student's answer ethical?

Explain the cost model and the revaluation model : Prepare the journal entries to record the transactions and events described above. Explain the cost model and the revaluation model

Prepare a condensed cost of goods manufactured schedule : Prepare a condensed cost of goods manufactured schedule for May 2022. May 1 inventories-finished goods $ 14,580, work in process $ 16,980.

What are bond prices and yields doing : Explain in words the basic forces and incentives operating in this part of business cycle and What are bond prices and yields doing

What is the product profit margins using three methods : What is the product profit margins using three methods of overhead allocation: plant-wide rate; departmental rates; and activity-based costing

User Account

All Pages