Jasper Ltd adopts the revaluation model for measuring buildings. As of 30 June 2021, Jasper Ltd has
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Question:
Jasper Ltd adopts the revaluation model for measuring buildings.
As of 30 June 2021, Jasper Ltd has one building. The following information relating to the building is available:
- Purchased on 2 July 2009 at a cost of $150,000. Estimated residual value $15,000, and useful life 20 years
- Extensions completed on 30 June 2018, at a cost of $45,000. After the extensions the building’s useful life was increased by 5 years. The residual value did not change.
- The building was revalued upwards on 30 June 2020 to a fair value of $130,000. This resulted in a gain on revaluation of $10,656. The residual value did not change. However Jasper Ltd determined that the building had a remaining useful life of 10 years.
On 30 June 2021, and prior to recording depreciation for the year, Jasper Ltd obtained a fair value for the building at $100,000.
The company uses straight-line depreciation, the reporting period ends 30 June, the tax rate is 30%, and journal entries are recorded to the nearest dollar.
Required:
Prepare the necessary journal entries for the revaluation of the building on 30 June 2021 ONLY. (10 marks)
Related Book For
Applying International Financial Reporting Standards
ISBN: 978-0730302124
3rd edition
Authors: Keith Alfredson, Ken Leo, Ruth Picker, Paul Pacter, Jennie Radford Victoria Wise
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