On 1 July 2017, Guinness Ltd acquired two assets within the same class of plant and equipment for cash. Information on these assets is as follows.     Cost ($)                                   Expected Useful Life Machine A                  100,000                                   5 years Machine B                   60,000                                     3 years The machines are expected to generate benefits evenly over their useful lives. The class of plant and equipment is accounted for subsequent to acquisition using the revaluation model.   At 30 June 2018, information about the assets is as follows.      Fair Value ($)   Machine A 84,000     Machine B 38,000       On 1 January 2019, Machine B was sold for $29 000 cash.   At 30 June 2019, information on the machines is as follows.     Fair Value ($)                         Expected Useful Life Machine A                                         58,000                                     3 years Required:   a) Prepare the journal entries in the records of Guinness Ltd to record the events for the year ended 30 June 2018 b) Prepare journal entries to record the events for the year ended 30 June 2019.

Question

On 1 July 2017, Guinness Ltd acquired two assets within the same class of plant and equipment for cash. Information on these assets is as follows.    

Cost ($)                                   Expected Useful Life

Machine A                  100,000                                   5 years

Machine B                   60,000                                     3 years

The machines are expected to generate benefits evenly over their useful lives. The class of plant and equipment is accounted for subsequent to acquisition using the revaluation model.  

At 30 June 2018, information about the assets is as follows.     

Fair Value ($)  

Machine A 84,000    

Machine B 38,000      

On 1 January 2019, Machine B was sold for $29 000 cash.  

At 30 June 2019, information on the machines is as follows.    

Fair Value ($)                         Expected Useful Life

Machine A                                         58,000                                     3 years

Required:   a) Prepare the journal entries in the records of Guinness Ltd to record the events for the year ended 30 June 2018

b) Prepare journal entries to record the events for the year ended 30 June 2019.

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