Prepare journal entries to record the events

Reference no: EM133083301

Question: Revaluation of assets

On 1 July 2016. Kingdom Ltd acquired two assets within the same class of plant and equipment. Infomiation on these assets is as follows:

Cost Expected useful life

Machine A $100000 5 years

Machine B 60000 3 years

The machines are expected to generate benefits evenly over their useful lives. The class of plant and equipment is measured using fair value.

At 30 June 2017. information about the assets is as follows:

Fair value Expected useful life

Machine A $84000 4 years

Machine B 38000 2 years

On 1 January 2018. Machine B was sold for $29000 cash. On the same day. Kingdom Ltd acquired Machine C for $80000 cash Machine C has an expected useful life of 4 years. Kingdom Ltd also made a bonus issue of 10000 shares at $1 per share, using $8000 from the general reserve and $2000 from the asset revaluation surplus created as a result of measuring Machine A at fair value.

Required: a) Prepare journal entries to record the events for the year ended 30 June 2018.

Reference no: EM133083301

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