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Question - 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 - Prepare the necessary journal entries for the equipment on 30 June 2021.
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