Prepare relevant journal entries to record transactions

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Reference no: EM132538372

On 1 July 2018 Fraser Ltd acquired an item of equipment with the acquisition cost of $630,000. The equipment can be used for 9 years.

On 30 June 2019, the end of financial year, the fair value of the equipment was $576,000. The equipment was sold for $580,000 on 1 January 2020.

Non-current assets are depreciated evenly over the useful life and has no residual value. The company uses the revaluation model to record the equipment. The income tax rate is 30%. Ignore GST.

Required:

Question a) Prepare relevant journal entries to record transactions for non-current asset in 2018 and 2019

Question b) Should a revaluation increment be included as part of profit or loss? Explain.

Reference no: EM132538372

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