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Prepare journal entries to record the depreciation expense

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Question - On 1 July 2016, Burrows Ltd purchased a bulding for $800,000. The estimated useful life of the building was 20 Years, with a residual value of nil.

On 1 Oct 2016, Burrows Ltd, Purchased a truck at a total cost of $60000. The estimated life of the truck is kilometres driven was 160,000 Kms with an estimated residual value of $4000.

Burrows Ltd uses straight line depreciation for buildings and the units of production method based on kilometers driven for the truck. The entity's reporting period ends 30 June .

Required -

a. Prepare Journal entries to record the purchase of the building and the truck.

b. Prepare journal entries to record the depreciation expense for the year ended 30 June 2017 if the truck was driven 16,000 kilometers in the financial year 2017.

c. Assume that on 1 July 2017 the entity revalued the building the building upwards by $50,000 and the truck downwards by $20000. Prepare the journal entries for the revaluations.

Reference no: EM133047400

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