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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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
Transcribed Image Text:Question 8.10
Burgundy Limited purchased a plant on 2 January 20X1 for C80 000. The plant is measured under the
revaluation model, using the net replacement value method, and is depreciated on the straight-line
basis, over its estimated economic useful life of 5 years, to a nil residual value.
The following fair values were measured by an independent valuer using the cost approach (often called
the current replacement cost):
Date
Fair value
01 January 20X2
C96 000
01 January 20X3
C40 000
01 January 20X4
C40 000
Burgundy transfers a portion of the revaluation surplus to retained earnings on an annual basis.
There were no indications of impairment at the end of any of the years.
Required:
Show all related journal entries for the years ended 31 December 20X2, 20X3 and 20X4.
Ignore tax.
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- Wardell Company purchased a minicomputer on January 1, 2022, at a cost of $48.000 The computer was depreciated using the straight-line method over an estimated five-year life with an estimated residual value of $3,000. On January 1, 2024, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $1,200 Exercise 11-23 (Algo) Part 2 2. Prepare the year-end journal entry for depreciation on December 31, 2024. Assume that the company uses the double-decline balance method instead of the straight-line method. Note: If no entry is required for a transaction/event, select "No journal entry required in the first account field. Do not round intermediate calculations. Round your final answers to nearest whole dollar. View transaction list Journal entry worksheet 1 Record depreciation expense for 2024,arrow_forwardAvalon Industries buys equipment for $90,000, expects to use it for six years, and then sell it for $6,000. Using the straight-line method, the company should report annual depreciation for the equipment of: Multiple Choice O $15,000. O O $14,000. $28,000. $31,750.arrow_forward
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