Question: On 1 July 2023, Herd Ltd. acquired a machine for $230,000 and decided to depreciate it for 20 years with no residual amount. The tax

On 1 July 2023, Herd Ltd. acquired a machine for $230,000 and decided to depreciate it for 20 years with no residual amount. The tax rate is 25%. For tax purpose, the machine has a 10% depreciation rate and no residual amount. Assume that the fair values of this asset were:

Date Fair Value

1/7/2023 $240,000

31/8/2023 $250,000

30/6/2024 $230,000

Required

Using the revaluation model, prepare the relevant journal entries from the date of acquisition to 30 June 2024, including tax effects.

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