Reference no: EM132672357

On 1 November 2018, Auckland City Printers (ACP) imported a new multi-colour printing machine (No-10) for $68,300 cash. In addition, ACP paid $6,500 of import duties and $1,200 of transport costs for the machine on 3 November 2018. The useful life of the machine and the residual value were estimated to be 8 years and $7,000 respectively. ACP decides to depreciate the machine using straight-line basis. The company's financial year-end is 30 June.

1. On 30 June 2019, Auckland City Printers revalued the machine to $73,000 following a review by an independent valuer.
2. On 1 July 2019, due to the changes in technology caused the company to revise the estimated useful life of the printing machine from 8 years to 6 years. On the same day, it was also determined that the residual value of the machine is nil. 
3. On 30 June 2020, the printing machine has been revalued at a fair value of $55,200. 
4. On 30 September 2020, the accountant believes that the value of the printing machine has declined substantially. The value in use is nil, but it is estimated that the company may be able to sell the printing machine for $35,000 to a purchaser and the costs associated with making the sale would be $2,000. 
5. On 1 October 2020, Auckland City Printers sold the printing machine for $32,000 cash.

Required:

Problem (a) Prepare relevant journal entries to record the depreciation expense for the year ended 30 June 2019 and revaluation entries on 30 June 2019.