Required: Prepare all required journal entries for annual depreciation and revaluation for 2014 to 2017. Note: Dates are required for all journal entries, however explanations are not required.
Axel Ltd. owns a equipment that it had purchased on January 1, 2014 for $2,500,000 cash. Axel applies the revaluation model to account for its assets and re-values them annually. Axel uses straight-line
The asset's fair values were as follows:
December 31, 2014 $2,300,000
December 31, 2015 $2,400,000
December 31, 2016 $2,105,000
On January 1, 2015 Axel replaced a motor in the equipment at a total cost of $375,000. This new motor is expected to add an additional 6 years to the useful of the equipment, and the residual value is now estimated to be $150,000 at the end of the useful life. As well, Axel has determined that the most appropriate method of depreciating this equipment is now the diminishing balance method.
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