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Prepare general journal entries to record the revaluations

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Question - REVALUATIONS & DISPOSAL OF NON-CURRENT ASSET - At 30 June 2020 Brothers Limited reported the following information for the respective non-current assets: Machinery at cost $400,000 with Accumulated depreciation amount of $100,000; Buildings at cost $900,000 with Accumulated depreciation amount of $350,000.

At 1 July 2020, the directors of Brothers Ltd decide to adopt the revaluation model and revalue the non-current asset classes to the following fair values: Machinery at $250,000 and Buildings at $850,000.

Required -

(i) Prepare general journal entries to record the revaluations, including any closing entries at the end of the reporting period.

(ii) Assume that on 31 December, 2020 the company sold machinery for $280,000 cash. The machinery had a useful life of 10 years and residual value of $50,000. Use straight-line method of depreciation. Provide the necessary general journal entry to record the sale and derecognition of machinery. Assume GST of 10%.

Reference no: EM133068115

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