s identified its non-current assets consist of three classes: goodwill, land and plant. Details of items included in each class appear below. Goodwill Total goodwill is $800,000 and no impairments have previously been recorded. $600,000 of this total relates to the purchase of Company B on 1 March 2020. The estimated fair value of this goodwill at 30 June 2021 is $950,000. The remaining $200,000 of the total goodwill relates to the purchase of Company C on 1 January 2021. The estimated recoverable amount of this goodwill at 30 June 2021 is $150,000. Land Land was acquired on 1 August 2017 for $1,200,000. The estimated fair value of the land at 30 June 2021 is $2,000,000. However, if the land was sold, disposal costs of $50,000 would be incurred. Plant Plant was originally acquired for $300,000 on 1 May 2017. When purchased, the p
Aaa-One Ltd has identified its non-current assets consist of three classes:
Goodwill
Total goodwill is $800,000 and no impairments have previously been recorded.
$600,000 of this total relates to the purchase of Company B on 1 March 2020. The estimated fair value of this goodwill at 30 June 2021 is $950,000. The remaining $200,000 of the total goodwill relates to the purchase of Company C on 1 January 2021. The estimated recoverable amount of this goodwill at 30 June 2021 is $150,000.
Land
Land was acquired on 1 August 2017 for $1,200,000. The estimated fair value of the land at 30 June 2021 is $2,000,000. However, if the land was sold, disposal costs of $50,000 would be incurred.
Plant
Plant was originally acquired for $300,000 on 1 May 2017. When purchased, the plant was considered to have a nil residual value and a 10 year useful life for both accounting and tax purposes. The estimated market value of the plant at 30 June 2021 is $250,000.
Aaa-One Ltd’s policy to date has been to apply the cost model and
The applicable tax rate is 30%.
Required:
- Prepare
journal entries for any necessary revaluations at 30 June 2021. - Prepare any necessary journal entries associated with the three classes of assets for the year ending 30 June 2023.
- Prepare an extract of the
balance sheet as at 30 June 2023 which details the balance of all accounts associated with the three classes of assets and any revaluations.
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