On 30 June 2022, Simon’s Turf Farm reported their Water Desalinator in the statement of financial position as part of property, plant and equipment at a fair value of $189 000.

The following information was also available in relation to the water desalinator:

• The straight-line method of depreciation is used. Depreciation is calculated to the nearest month and all figures are rounded to the nearest dollar. The tax rate is 30%.
• Purchased and installed on 2 July 2021 at a cost of $200 000.
• The revaluation on 30 June 2022 resulted in a gain on revaluation of $7000, a revised remaining useful life of 9 years and a revised residual value of $18 000.

Required:

On 30 June 2023, Simon’s Turf Farm requires that you record journal entries for depreciation and a revaluation on the water desalinator. The fair value of the water desalinator on this date is $165 000.

Answer rating: 100% (QA)

Answer 2nd July Cost of Water Desalinator is 200000 On 30th juneWater Desalinator Recorded at fair v... View the full answer