# Hand Creamy Limited31 December31 December31 December31 December2016201720182019Balance SheetNon-current assetsLandEquityRevaluation surplusIncome StatementOther income and expensesLoss on revaluationLoss on disposalStatement of Comprehensive IncomeUnrealised gainRevaluation surplus

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Hand Creamy Limited purchased a land for \$150,000 cash on 1 September 2016 and a machine for \$300,000 cash on 1 July 2017. The useful life of the machine is 10 years, no residual value and straight line method for depreciation. The company uses the revaluation model for those assets. On 31 December 2017, the fair value of the land was \$200,000 and \$332,500 for the machine. On 31 December 2018, the fair value of the land was \$130,000 and \$280,500 for the machine. On 1 March 2019, the land was sold for \$120,000 by cash. The machine has a fair value of \$305,500 on 31 December 2019. The balance day is 31 December.

Required a) Provide the journal entries related to the land and machine.

b) Disclose the extract of Balance Sheet, Income Statement and Statement of Comprehensive Income for the land at 31 December 2016, 2017, 2018 and 2019. Use the table provided. (see photo attached)

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Step 1

a)

Depreciation:

Machinery = Cost/ life

= \$300,000/10 years

= \$30,000

Let's assume the life of land is 10 years

Land = Cost/ life

= \$150,000/10

= \$15,000

Following are the journal entries:

...

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