On 1 July 2015, plant is acquired at a cost of $6,000,000. The plant is to be
Question:
On 1 July 2015, plant is acquired at a cost of $6,000,000. The plant is to be depreciated using the straight-line method on the basis of an estimated useful life of 15 years.
On 30 June 2018, it is determined that the plant has a value in use of $4,000,000 and a fair value of $3,600,000 before costs of disposal of $100,000. The remaining useful life of the plant is reassessed to be 8 years.
On 30 June 2020, it is determined that the plant has a value in use of $2,400,000 and a fair value of $2,200,000 before costs of disposal of $100,000. The remaining useful life of the plant is reassessed to be 5 years.
requirement :
Prepare the journal entries for depreciation and any adjustments relating to impairment on 30 June 2018, 30 June 2020 and 30 June 2021.
Expert Answer:
On 30 th June 2018 Depreciation Adjustment The plant has a new remaining useful life of 8 years and ... View the full answer
