Alder Ltd had several Property, Plant & Equipment items and they followed the cost model to measure
Question:
Alder Ltd had several Property, Plant & Equipment items and they followed the cost model to measure their assets. Its financial year end is 31 March. On 31 March 2021, the company’s PPE items and their balances are as follows:
Land ($) | Plant ($) | Motor Vehicles ($) | |
Cost as at 01 April 2020 | 1,200,000 | 300,750 | 550,000 |
Less: Accumulated Depreciation | 175,500 | 267,500 | |
Less: Accumulated Impairments | |||
Balance as at 31 March 2021 | 1,200,000 | 125,250 | 282,500 |
Alder Ltd uses the straight-line method to depreciate Plant and Motor Vehicles.
Alder Ltd has been following the cost model to measure PPE however on 1 April 2021, the company decides to revalue the Land and Motor Vehicles. An independent value assessed the assets at fair values as follows:
Land 1,500,000
Motor Vehicles 250,000
Required:
Show the journal entries required on 1 April 2021 to reflect the revaluation for Land and Motor Vehicles. Show all workings.
Intermediate Accounting
ISBN: 978-0176509736
10th Canadian Edition, Volume 1
Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,