The equipment consisted of two machine machine a and

Reference no: EM13602446

In the 30 June 2009 annual report of Bruce Ltd. the equipment was reported as follows: Equipment (at cost) $500,000
Accumulated depreciation $150,000
= $350,000

The equipment consisted of two machine, Machine A and Machine B. Machine A had cost $300,000 and had a carrying amount of $180,000 at 30 June 2009, and Machine B had cost $200,000 and was carried at $170,000. Both machines are measure using the cost model, and depreciated on a straight-line basis over a 10-year period.

On 31 December 2009, the directors of Bruce Ltd decided to change the basis of measuring the equipment from the cost model to the revaluation model. Machine A was revalued to $180,000 with an expected useful life of 6 years, and Machine B was revalued $155,000 with an expected useful life of 5 years.

At 30 June 2010, Machine A was assessed to have a fair value of $163,000 with an expected useful life of 5 years, and Machine B's fair value was $136,500 with an expected useful life of 4 years. The tax rate is 30%

Required:

1. Prepare the journal entries during the period 1 July 2009 to 30 June 2010 in relation to the equipment.

2. According to accounting standards, on what basis may management change the method of asset measurement, for example from cost to fair value?

Reference no: EM13602446

Questions Cloud

Compute how much the buyer saved by following this strategy : taos company purchased merchandise for resale from tuscon company with an invoice price of 22000 and credit terms of

What is the probability that there will be a severe weather : the weather forecast for tomorrow indicates that there is a 70 chance that there will be a high wind speed. the

If the local atmospheric pressure is 101 kpa and : a barometer is used to measure atmospheric pressure contains mercury with a density of 13590 kgm3 . if the local

The water gradually descends 7 m as the pipe increases in : question water is moving with a speed of 4.7 ms through a pipe with a cross-sectional area of 4.3 cm2. the water

The equipment consisted of two machine machine a and : in the 30 june 2009 annual report of bruce ltd. the equipment was reported as follows equipment at cost

A study was conducted to determine whether flipping a : a study was conducted to determine whether flipping a penny or spinning a penny has an effect on the proportion of

Winona miller president of clj products is considering the : winona miller president of clj products is considering the purchase of a computer-aided manufacturing system that

Determine the magnitude of the acceleration at the instant : to analyze the motion of a body that is traveling along a curved path to determine the bodys acceleration velocity and

A recreational equipment supplier finds that among orders : a recreational equipment supplier finds that among orders that include tents 40 also include sleeping mats. only 5 of

User Account

All Pages