Prepare the necessary journal entries for the equipment

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Reference no: EM132919615

Kbar Ltd adopts the revaluation model for measuring equipment. On 30 June 2021, and prior to recording depreciation for the year, Kbar Ltd obtained a fair value for the equipment at $85 000.

In the previous year, Kbar Ltd had revalued this equipment to a fair value of $70 000. This had resulted in recording a decrease of $20 000 for the equipment. The equipment had a remaining useful life of 7 years on that date (no residual value).

The company uses straight-line depreciation, the reporting period ends 30 June, and the tax rate is 30%.

Required:

Problem 1: Prepare the necessary journal entries for the equipment on 30 June 2021.

Reference no: EM132919615

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