Christos Ltd. has a machinery with a carrying amount of $300,000 (accumulated depreciation being $50,000). The asset had cost $150,000. The machinery was revalued upwards from $130,000, with the following accounting entries were passed:

Dr Accumulated Depreciation 20,000

Dr Machinery 200,000

Cr Deferred Tax Liability 66,000

Cr Asset Revaluation Reserve 154,000

Show the appropriate accounting entries, if the machinery is now assessed as having a fair value of $ 70,000. The tax rate is 30%.

Answer rating: 100% (QA)

JOURNAL ENTRY TO BRING DOWN THE FAIR VALUE OF MACHINERY TO 70000 Accumulated Depreciation Dr 50000 D... View the full answer