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(16 marks) Wastewater Ltd acquired an item of plant on 1 July 2016 for $3 660...
Wastewater Ltd acquired an item of plant on 1 July 2016 for $3 660 000. When the item of plant was acquired, it was initially assessed as having a life of 10000 hours. During the reporting period ending 30 June 2017 the plant was operated for 3000 hours. At 1 July 2017 the plant had a remaining useful life of 7000 hours. On 1 July 2017 the plant underwent a major upgrade costing $234 600. Management believes that this upgrade will add a further 2000 hours of operating time to the plant's life. During the reporting period ended 30 June 2018 the plant was operated for 4000 hours. On 1 July 2018 the plant underwent a further major upgrade, the cost of which amounted to $344 900, and this added a further 3100 hours' operating time to its life. During the reporting period ending 30 June 2019 the plant was operated for 3800 hours. Required: Prepare all the journal entries that Wastewater Ltd would prepare for the years ending 30 June 2017, 30 June 2018 and 30 June 2019 to account for the acquisition, subsequent expenditure and depreciation on the asset.
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ekkarill92 answered 2 years agoRelated Solutions
Question 2: (16 marks) Wastewater Ltd acquired an item of plant on 1 July 2016 for...
Question 2: Wastewater Ltd acquired an item of plant
on 1 July 2016 for $3 660 000. When the item of plant was acquired,
it was initially assessed as having a life of 10000 hours. During
the reporting period ending 30 June 2017 the plant was operated for
3000 hours.
At 1 July 2017 the plant had a remaining useful life of 7000
hours. On 1 July 2017 the plant underwent a major upgrade costing
$234 600. Management believes that...
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000...
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for
$450000 when its’ carrying value in Liala Ltd book was $600000
(costs $900000, accumulated depreciation $300000). This plant has a
remaining useful life of five (5) years form the date of sale. The
group measures its property plants and equipment using a costs
model. Tax rate is 30 percent. Required: Pass the necessary entries
on 30 June 2017 and 30 June 2018 to eliminate the...
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000...
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for
$450000 when its’ carrying value in Liala Ltd book was $600000
(costs $900000, accumulated depreciation $300000). This plant has a
remaining useful life of five (5) years form the date of sale. The
group measures its property plants and equipment using a costs
model. Tax rate is 30 percent.
Required:
Pass the necessary entries on 30 June 2017 and 30 June 2018 to
eliminate the...
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000...
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for
$450000 when its’ carrying value in Liala Ltd book was $600000
(costs $900000, accumulated depreciation $300000). This plant has a
remaining useful life of five (5) years form the date of sale. The
group measures its property plants and equipment using a costs
model. Tax rate is 30 percent.
Required: Pass the necessary entries on 30 June 2017 and 30 June
2018 to eliminate the...
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000...
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for
$450000 when its’ carrying value in Liala Ltd book was $600000
(costs $900000, accumulated depreciation $300000). This plant has a
remaining useful life of five (5) years form the date of sale. The
group measures its property plants and equipment using a costs
model. Tax rate is 30 percent.
Required:
Pass the necessary entries on 30 June 2017 and 30 June 2018 to
eliminate the...
On 1 July 2018 Fraser Ltd acquired an item of equipment with an acquisition cost of...
On 1 July 2018 Fraser Ltd acquired an item of equipment with an
acquisition cost of $400,000. The equipment can be used for 8
years. On 30 June 2019, the end of financial year, the fair value
of the equipment was $357,000. The equipment was sold for $330,000
on 1 January 2020. Non-current asset is depreciated evenly over the
useful life and has no residual value. The company uses the
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Study 3 (Total = 25 Marks) Business Combination On 1 July 2020, Tall Ltd acquired...
Study 3 (Total = 25 Marks)
Business Combination
On 1 July 2020, Tall Ltd acquired all of the assets and liabilities
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Ltd issued 100 000 shares that at date of issue had a fair value of
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The asset and liabilities of Blacks Ltd at 1...
Black Ltd owns 100% of Canary Ltd. At 1 July 2016, Black Ltd sold an item...
Black Ltd owns 100% of Canary Ltd.
At 1 July 2016, Black Ltd sold an item of plant to Canary Ltd
for $210 000.
Black Ltd had originally paid $400 000 for the plant on 1 July
2014, when it had an expected useful life of 8 years.
The tax rate is 30%.
(a) To eliminate the gain or loss on sale of the
asset for the year, the group accountant processes the following
entry in the consolidation worksheet:
Dr Gain...
On 1 July 2016 Tim Ltd acquired all the share capital of Tam Ltd and goodwill...
On 1 July 2016 Tim Ltd acquired all the share capital of Tam Ltd
and goodwill on acquisition amounted to $110,000. The management of
Tim Ltd impaired the goodwill by $20,000 in the year ended 30 June
2018. An additional impairment of $30,000 was recorded in the year
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Dr Impairment loss...
Max Ltd acquires an item of machinery on 1 July 2016 for a total acquisition cost...
Max Ltd acquires an item of machinery on 1 July 2016 for a total
acquisition cost of $61,000. The life of the asset is assessed as
being six (6) years, after which time Max Ltd expects to be able to
dispose of the asset for $6,000. It is expected that the benefits
will be generated in a pattern that is best reflected by the
sum—of—digits depreciation approach. On 1 July 2019, owing to
unforeseen circumstances, the machinery is exchanged for...
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