on 1 july 2018 Grant ltd acquired an item of equipment with an acquisition cost of $590,000.

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Question:

on 1 july 2018 Grant ltd acquired an item of equipment with an acquisition cost of $590,000. the equipment can be used for 9 years. residual value is $50,000. on 30 june 2019, the end of financial year the fair value of the equipment was $560,000. the equipment was sold for $485,000 on 1 January 2020. noncurrent asset is depreciated evenly over the useful life and has no residual value. the company uses the revaluation model to record non-current assets. the income tax rate is 30%. ignore GST.

required:

a. prepare relevant journal entries to record non-current assets in 2018/2019 and 2019/2020 financial years in accordance with AASB 116 and AASB 136.

b. provide disclosures of the equipment at the end of 2019 and 2020.