China Wu Yi company acquired a front loader on January $2017$ for Kshs$.7,500,000.$ This construction equipment is in a class of equipment on which the company has adopted revaluation accounting. The front loader is being depreciated on a straight line basis over its $10-$year useful life. The equipment residual value is assumed to be nil at the end of its useful life due to heavy construction work.

The appraised value of the front loader approximates the carrying value at $31$ December $2017$ and $2019.$ On $31$ December $2018,$ the fair value is determined to be $6,600,000$ and on $31$ December $2020$ the fair value is determined to be Kshs$.3,750,000.$

Required

a$)$ Prepare journal entries for each year from $2017$ to $2020(8$ marks$)$

b$)$ For each of the year show the entries that will appear in the statement of profit loss and other comprehensive income and in the statement of financial position in relation to the asset. $(7$ marks$)$

Answer rating: 100% (QA)

a Here are the journal entries for each year from 2017 to 2020 2017 Debit Construction Equipment Fro... View the full answer