Question

In: Accounting

Footloose Limited acquired furniture and fittings on 1 July 2019 for $42 000.... Footloose Limited acquired...

Footloose Limited acquired furniture and fittings on 1 July 2019 for $42 000.... Footloose Limited acquired furniture and fittings on 1 July 2019 for $42 000. The estimated useful life of the furniture and fittings at acquisition date was 8 years and the residual value was $2000. The company sold all the furniture and fittings on 1 January 2025 for $18 000. The journal entry to reflect the sale is:

Solutions

Expert Solution

If questions is silent about the rate of depreciation and also mention about the salvage value and useful life we prefer the SLM method of depreciation.

At the time of sale we value the WDV of that cost and compare with the sales consideration so that we can find the gain or loss on sale of that asset.

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

On 1 July 2017, Koala Ltd acquired a depreciable asset at a cost of $500 000....
On 1 July 2017, Koala Ltd acquired a depreciable asset at a cost of $500 000. The asset is to be depreciated for accounting purposes over a useful life of four years using the straight-line method and a zero residual value. For tax purposes, depreciation is deductible at the rate of 40% per annum on the reducing balance. For the year ended 30 June 2018, taxable income of Koala Ltd was $250 000. On 1 July 2018, Koala Ltd revalued...
ABC Ltd acquired a machine for $750 000 on 1 July 2018. The machine had a...
ABC Ltd acquired a machine for $750 000 on 1 July 2018. The machine had a useful life of five years and was depreciated on a straight-line basis with no disposal value. ABC Ltd adopts the cost model for accounting for assets in this class. ABC Ltd makes the following estimates of the value of the machine: Date Net selling price Value in use Fair Value 30 June 2019 $550 000 520 000 590 000 30 June 2020 $460 000...
ABC Ltd acquired a machine for $750 000 on 1 July 2018. The machine had a...
ABC Ltd acquired a machine for $750 000 on 1 July 2018. The machine had a useful life of five years and was depreciated on a straight-line basis with no disposal value. ABC Ltd adopts the cost model for accounting for assets in this class. ABC Ltd makes the following estimates of the value of the machine: Date Net selling price Value in use Fair Value 30 June 2019 $550 000 520 000 590 000 30 June 2020 $460 000...
ABC Ltd acquired a machine for $750 000 on 1 July 2018. The machine had a...
ABC Ltd acquired a machine for $750 000 on 1 July 2018. The machine had a useful life of five years and was depreciated on a straight-line basis with no disposal value. ABC Ltd adopts the cost model for accounting for assets in this class. ABC Ltd makes the following estimates of the value of the machine: Date Net selling price Value in use Fair Value 30 June 2019 $550 000 520 000 590 000 30 June 2020 $460 000...
Stairwell Limited acquired 100% of the share capital of Bannister Limited for $475 000. Bannister had...
Stairwell Limited acquired 100% of the share capital of Bannister Limited for $475 000. Bannister had total shareholder’s equity of $400 000. The book values of Bannister Limited’s assets were: buildings $200 000, machinery $240 000. The fair values of these assets were: buildings $240 000, machinery $250 000. The tax rate is 30%. The acquisition analysis will determine: a goodwill of $75 000. a goodwill of $40 000. a gain on bargain purchase of $25 000. a gain on...
Q1 A machine purchased on 1 July 2019 cost $100 000 and has a zero estimated...
Q1 A machine purchased on 1 July 2019 cost $100 000 and has a zero estimated salvage value. The useful life of the machine is five years. If the machine was sold on 30 September 2021, what would its net book value be? a. $55 000 b. $45 000 c. $50 000 d. $60 000 Q2 An impairment loss is calculated as the amount by which the: Select one: a. carrying amount value of an asset exceeds its original cost...
On 1 July 2019 Short Ltd acquired 80% of the shares of Tall Ltd for $436...
On 1 July 2019 Short Ltd acquired 80% of the shares of Tall Ltd for $436 200. At this date the equity of Tall Ltd consisted of share capital of $280 000 and retained earnings of $140 000. All the identifiable asset and liabilities of Tall Ltd were recorded at amounts equal to fair value except for: Carrying amount FV Land 80 000 95 000 Plant (Cost $380 000) 300 000 330 000 Inventories 15 000 18 000 The plant...
On July 1, 2019 Alora Inc. acquired a manufacturing plant in Nova Scotia for $1,800,000. The...
On July 1, 2019 Alora Inc. acquired a manufacturing plant in Nova Scotia for $1,800,000. The entry to record acquisition of the building has already been recorded. The plant, employing 50 workers, began operations and is expected to be in operations for 20 years with no residual value. In connection with the purchase, the following government assistance was received: i) Alora received $360,000 in government assistance. This amount does not need to be repaid as long as the plant operates...
Roho Company acquired equipment on July​ 1, 2019, for $100,000. The residual value is​ $20,000 and...
Roho Company acquired equipment on July​ 1, 2019, for $100,000. The residual value is​ $20,000 and the estimated life is 5 years or​ 40,000 hours. Compute the depreciation expense for the years ending December​ 31, 2019 and December​ 31, 2020 if Roho Company uses the double−declining−balance method of depreciation. A. $9000 for​ 2019; $ 36400 for 2020 B. $20000 for​ 2019; $ 32000 for 2020 C. $4500 for​ 2019; $ 9000 for 2020 D. $40000 for​ 2019; $ 24000 for...
Carina Ltd has acquired all the shares of Finn Ltd on 1 July 2019 for $...
Carina Ltd has acquired all the shares of Finn Ltd on 1 July 2019 for $ 225 000. The accountant for Carina Ltd, having studied the requirements of AASB 3 Business Combinations, realises that all the identifiable assets and liabilities of Finn Ltd must be recognised in the consolidated financial statements at fair value. Although he is happy about the valuation of these items, he is unsure of a number of other matters including pre-acquisition entries and business combination valuation...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT