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.

Answer rating: 100% (QA)

Here are the relevant journal entries using the revaluation model for the machine acquisition and su... View the full answer