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Prepare the necessary journal entries for the period

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Question - Revaluation of property, plant and equipment - Mr Whippy Ltd acquires a new ice cream van on 1 July 2016 for $120,000. The useful life and residual value of the ice cream van is estimated to be 10 years and $10,000 respectively. At 30 June 2017, Mr Whippy Ltd uses the cost model for its ice cream vans. The directors elect to depreciate its ice cream vans on a straight-line basis.

Mr Whippy Ltd's directors then elect to adopt the revaluation model on 1 July 2017. They determine at this date that the fair value of this ice cream van is $105,000. As at 1 July 2017, this ice cream van is expected to have a remaining useful life of 9 years, and the estimated residual value is reassessed from $10,000 to $8,000.

At 30 June 2018, the directors determine that the fair value of this ice cream van is $100,000.

Required - Prepare the necessary journal entries for the period 1 July 2016 to 30 June 2018 to record the acquisition of the ice cream van, depreciation, and revaluation entries in accordance with AASB 116. You are not required to prepare any journal entries for income tax. Show all relevant dates and workings.

Reference no: EM132955145

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