Q1 – A company purchased equipment on 1^st January 2020 which cost £30,000 with a useful life of 3 years. On 31^st October 2020, an update to the equipment meant that a revaluation was completed. The expert valued the equipment at £40,000 and recommended that the useful life from revaluation will be 5 years.

1. (i) What is the journal to process the revaluation on 31^st October 2020?
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3. (ii) What is the journal to process the depreciation to 31^st December 2020
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5. (iii) What is the Net Book Value of the equipment on 31^st December 2020?
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Q2 – Industrial Machinery was purchased on 1^st January 2020 for £27,000 with a useful life of 9 years. On 30^th June 2020, a new part increased the value of the machinery to £40,000 and increased the useful life by 1 and a half years.

On 1^st January 2021, the value of the machinery was severely altered due to a fire in the warehouse and the valuer reduced the value of the machinery as of 1^st January 2021 to £21,000 and re-set the useful life to 7 years.

1. (i) What is the journal(s) to process the transaction on 30th June 2020?
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3. (ii) What journal is required to be processed on 31^st December 2020 and what is the Net Book Value of the Machinery at this date?

Answer rating: 100% (QA)

Q1 i Journal to process the revaluation on 31st October 2020 Equipment 10000 Revaluation reserve 100... View the full answer