On 30 June 2020, James Ltd acquired a machine for $200 500 cash, with an expected useful life of ten years and a zero residual value. The company has adopted fair value for the valuation of non-current assets. On 30 June 2021, the company hired an independent valuer who assessed the value of the machine to be $185 000 with a remaining useful life of 8 years and residual value of $5 000. On 30 June 2022, the fair value of the machine is $150 000 with a remaining useful life of 6 years and zero residual value. The company uses straight-line depreciation method for depreciating all its property, plant and equipment. Income tax rate is 30%. The financial year ends on 30 June. Required Prepare all the necessary journal entries related to the machine from 30 June 2020 to 30 June 2022.
On 30 June 2020, James Ltd acquired a machine for $200 500 cash, with an expected useful life of ten years and a zero residual value. The company has adopted fair value for the valuation of non-current assets.
On 30 June 2021, the company hired an independent valuer who assessed the value of the machine to be $185 000 with a remaining useful life of 8 years and residual value of $5 000.
On 30 June 2022, the fair value of the machine is $150 000 with a remaining useful life of 6 years and zero residual value.
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