Question: in the 30 june 2016 annual report of emu ltd...
In the 30 June 2016 annual report of Emu Ltd, the equipment was reported as follows:
Equipment (at cost)
$ 500 000
The equipment consisted of two machines, Machine A and Machine B. Machine A had cost $300 000 and had a carrying amount of $180 000 at 30 June 2016, and Machine B had cost $200 000 and was carried at $170 000. Both machines are measured using the cost model, and depreciated on a straight-line basis over a 10-year period.
On 31 December 2016, the directors of Emu Ltd decided to change the basis of measuring the equipment from the cost model to the revaluation model. Machine A was revalued to $180 000 with an expected useful life of 6 years, and Machine B was revalued to $155 000 with an expected useful life of 5 years.
At 1 July 2017, Machine A was assessed to have a fair value of $163 000 with an expected useful life of 5 years, and Machine B’s fair value was $136 500 with expected useful life of 4 years.
a) Prepare journal entries to record depreciation during the year ended 30 June 2017, assuming there was no revaluation.
b) Prepare the journal entries for Machine A for the period 1 July 2016 to 30 June 2017 on the basis that it was revalued on 31 December 2016.?