Reference no: EM133001503

Question - The Last Drop Pty Ltd is a fictitious contract bottling company. The entity owns production equipment that bottles an assortment of beverages (alcoholic and non-alcoholic drinks).

The Last Drop Pty Ltd purchased the production equipment at a historical cost of $2 million ($2,000,000) on 1 July 2016. The production equipment is depreciated at 9% of cost (straight-line).

The reporting period commences on 1 July and concludes on 30 June in any given year.

The entity has decided to revalue its production equipment using the Revaluation Model (Net Method) and on 30 June 2019, the fair value of the production equipment was deemed to be $1,500,000.

Due to the Covid - 19 the company decided to revalue the production equipment again on 30 June 2020. On 30 June 2020, it was deemed that the Production equipment had a fair value of $1,300,000. The company provided the following:

Statement of Financial Position (Balance Sheet) Extract as at 30 June 2019

Non-Current Assets:

Production Equipment 1,500,000

Accumulated depreciation 0 $1,500,000

Shareholder's Equity

Revaluation surplus $40,000

Required -

Prepare the journal entry or entries for The Last Drop Bottling Pty Ltd to write back the production equipment as at 30 June 2019 to the carrying amount. No narration required.

Prepare the journal entry or entries for The Last Drop Bottling Pty Ltd to record the revaluation adjustment for the Production equipment using the Revaluation Model (Net Method) as at 30 June 2020. No narration required.