Prepare the necessary journal entries

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FINANCIAL ACCOUNTING Question:

Revaluation of Property, Plant and Equipment.

Rosen Ltd has a policy of revaluing its motor vehicles to fair value. The details at 30 June 20X4 relating to Rosen Ltd's motor vehicles, which has previously been revalued upwards by $5000 are as follows:

Motor Vehicles- $48,000

Less: Accum Dep- $12,000

Carrying Amount $36,000

At the date of the revaluation increment (1 July 20X3) the vehicles had a zero residual value and a useful life of 4 years. Depreciation has been calculated using the straight-line method. On 31 December 20X4, Rosen Ltd was informed that the fair value for the vehicles was $23,000. The useful life has not changed. At 30 June 20X5, the carrying amounts are not materially different from fair values.

Required:

i) Prepare the necessary journal entries at 31 Dec 20X4.

ii) Calculate the depreciation expense at 30 June 20X5.

Reference no: EM131772166

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