Don't give solution in image format.. Madalena Ltd. purchased three machines on 15 July 2023 on credit. The bank asked for a yearly interest payment of5%. In this purchase, GST of 10% is included. Machines A, B and C cost 35%, 40% and 25% of the total amount of $200,000. These machines are depreciated using a straight-line method and their useful lives are 10, 12 and 14 years,respectively. Soon after the purchase, Madalena Ltd. decided to keep these machines under the revaluation model. Onthat date, Madalena Ltd. received the following information about the fair values: Machine A: 65000 Machine B: 95000Machine C: 50000 Some months later, the fair values of these machines changed, these were collected on 31 Oct-23:Machine A: 58000 Machine B: 80000 Machine C: 38000 Before the end of the financial year, these are the new fairvalues: Machine A: 45000 Machine B: 101000 Machine C: 44000 Note that the useful lives of these assets have notchanged since their purchase. Required: Prepare the relevant journal entries from 15 July 2023 until the end of thefinancial year.

Under the revaluation model, an asset’s carrying value is its fair value (i.e., the revalued…

Answered: changed since their purchase. Required:…

changed since their purchase. Required: Prepare the relevant journal entries from 15 July 2023 until the end of the financial year.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 10PB: For each of the following unrelated situations, calculate the annual amortization expense and...

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Don't give solution in image format..

Madalena Ltd. purchased three machines on 15 July 2023 on credit. The bank asked for a yearly interest payment of
5%. In this purchase, GST of 10% is included. Machines A, B and C cost 35%, 40% and 25% of the total amount of $
200,000. These machines are depreciated using a straight-line method and their useful lives are 10, 12 and 14 years,
respectively. Soon after the purchase, Madalena Ltd. decided to keep these machines under the revaluation model. On
that date, Madalena Ltd. received the following information about the fair values: Machine A: 65000 Machine B: 95000
Machine C: 50000 Some months later, the fair values of these machines changed, these were collected on 31 Oct-23:
Machine A: 58000 Machine B: 80000 Machine C: 38000 Before the end of the financial year, these are the new fair
values: Machine A: 45000 Machine B: 101000 Machine C: 44000 Note that the useful lives of these assets have not
changed since their purchase. Required: Prepare the relevant journal entries from 15 July 2023 until the end of the
financial year.

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