Instructions:$-$ Answer ALL questions

$-$ Set financial calculator to $2$ decimal places

$-$ Items in compound journal entries MUST be listed in their descending order of value for the purpose of being graded correctly by Moodle.

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Gems Inc. uses revaluation accounting for its Equipment.$$ The following information has been provided.

July $7,2023$:$$ Purchased Equipment for $$250000$ on account.

Estimated Useful Life:$10$ years

Residual Value:$$ $$0$

Depreciation Method:$$ Straight$-$line $($nearest full month$)$

Frequency of Revaluation:$$ Annually

$$Valuation Data

July $7,2023$:$$ $$250000$

December $31,2023$:$$ $$234000$

December $31,2024$:$$ $$220000$

$$

Prepare all necessary journal entries at December $31,2023$ and $2024.$

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December $31,2023$

Dr$.$ Answer $1$ Question $2$EquipmentRevaluation GainDepreciation ExpenseMachineryBankRevaluation SurplusAccounts ReceivableRevaluation LossCashAccumulated Depreciation

$Answer $2$ Question $2$

$$

$$ Cr$.$ Answer $3$ Question $2$CashAccounts ReceivableRevaluation SurplusEquipmentAccumulated DepreciationBankRevaluation GainRevaluation LossMachinery

$$

$Answer $4$ Question $2$

To record depreciation expense

$$

Dr$.$ Answer $5$ Question $2$BankAccumulated DepreciationAccounts ReceivableRevaluation LossMachineryRevaluation SurplusCashRevaluation GainEquipment

$Answer $6$ Question $2$

$$

$$ Cr$.$ Answer $7$ Question $2$CashEquipmentMachineryRevaluation SurplusRevaluation LossAccounts ReceivableRevaluation GainDepreciation ExpenseAccumulated DepreciationBank

$$

$Answer $8$ Question $2$

To eliminate accumulated depreciation

$$

Dr$.$ Answer $9$ Question $2$Revaluation LossCashRevaluation GainRevaluation SurplusMachineryAccounts ReceivableBankEquipmentAccumulated Depreciation

$Answer $10$ Question $2$

$$

$$ Cr$.$ Answer $11$ Question $2$Revaluation LossAccounts ReceivableAccumulated DepreciationMachineryRevaluation GainCashRevaluation SurplusDepreciation ExpenseEquipmentBank

$$

$Answer $12$ Question $2$

To record change in reported value of asset

$$

$$

December $31,2024$

Dr$.$ Answer $13$ Question $2$Revaluation LossRevaluation SurplusAccounts ReceivableMachineryDepreciation ExpenseEquipmentCashAccumulated DepreciationBankRevaluation Gain

$Answer $14$ Question $2$

$$

$$ Cr$.$ Answer $15$ Question $2$MachineryRevaluation SurplusAccounts ReceivableRevaluation LossRevaluation GainAccumulated DepreciationBankEquipmentCash

$$

$Answer $16$ Question $2$

To record depreciation expense

$$

Dr$.$ Answer $17$ Question $2$Accounts ReceivableEquipmentRevaluation GainCashRevaluation SurplusBankMachineryAccumulated DepreciationRevaluation Loss

$Answer $18$ Question $2$

$$

$$ Cr$.$ Answer $19$ Question $2$Revaluation LossCashRevaluation SurplusDepreciation ExpenseEquipmentMachineryAccounts ReceivableAccumulated DepreciationBankRevaluation Gain

$$

$Answer $20$ Question $2$

To eliminate accumulated depreciation

$$

$-----------$

Remember:$$ Items in this compound journal entry MUST be listed in their descending order of value for the purpose of being graded

$$correctly by Moodle.

Dr$.$ Answer $21$ Question $2$EquipmentDepreciation ExpenseRevaluation LossMachineryBankRevaluation SurplusRevaluation GainCashAccumulated DepreciationAccounts Receivable

$Answer $22$ Question $2$

$$

Answer $23$ Question $2$Dr$.$Cr$.$ Answer $24$ Question $2$CashRevaluation GainMachineryEquipmentBankRevaluation SurplusAccumulated DepreciationRevaluation LossAccounts Receivable

$Answer $25$ Question $2$

$Answer $26$ Question $2$

$$ Cr$.$ Answer $27$ Question $2$EquipmentMachineryCashRevaluation GainAccumulated DepreciationAccounts ReceivableBankRevaluation SurplusRevaluation Loss

$$

$Answer $28$ Question $2$

To record change in reported value of asset