Solved

Burchells Ltd Owns a Machine That Originally Cost $36,000

Question 23

Multiple Choice

Burchells Ltd owns a machine that originally cost $36,000. It has been depreciated using the straight-line method for 3 years, giving an accumulated depreciation of $15,000 (the salvage value was estimated at $6,000 and the useful life at 6 years) . At the beginning of the current financial year its carrying value is therefore $21,000. It has been decided by the directors to revalue it to fair value, which is assessed to be $38,000. The salvage value and useful life are considered to be unchanged. What are the appropriate entries to record the revaluation and the depreciation expense for the current year (rounded to the nearest dollar) ?


A) Burchells Ltd owns a machine that originally cost $36,000. It has been depreciated using the straight-line method for 3 years, giving an accumulated depreciation of $15,000 (the salvage value was estimated at $6,000 and the useful life at 6 years) . At the beginning of the current financial year its carrying value is therefore $21,000. It has been decided by the directors to revalue it to fair value, which is assessed to be $38,000. The salvage value and useful life are considered to be unchanged. What are the appropriate entries to record the revaluation and the depreciation expense for the current year (rounded to the nearest dollar) ? A) B) C) D) E) None of the given answers.
B) Burchells Ltd owns a machine that originally cost $36,000. It has been depreciated using the straight-line method for 3 years, giving an accumulated depreciation of $15,000 (the salvage value was estimated at $6,000 and the useful life at 6 years) . At the beginning of the current financial year its carrying value is therefore $21,000. It has been decided by the directors to revalue it to fair value, which is assessed to be $38,000. The salvage value and useful life are considered to be unchanged. What are the appropriate entries to record the revaluation and the depreciation expense for the current year (rounded to the nearest dollar) ? A) B) C) D) E) None of the given answers.
C) Burchells Ltd owns a machine that originally cost $36,000. It has been depreciated using the straight-line method for 3 years, giving an accumulated depreciation of $15,000 (the salvage value was estimated at $6,000 and the useful life at 6 years) . At the beginning of the current financial year its carrying value is therefore $21,000. It has been decided by the directors to revalue it to fair value, which is assessed to be $38,000. The salvage value and useful life are considered to be unchanged. What are the appropriate entries to record the revaluation and the depreciation expense for the current year (rounded to the nearest dollar) ? A) B) C) D) E) None of the given answers.
D) Burchells Ltd owns a machine that originally cost $36,000. It has been depreciated using the straight-line method for 3 years, giving an accumulated depreciation of $15,000 (the salvage value was estimated at $6,000 and the useful life at 6 years) . At the beginning of the current financial year its carrying value is therefore $21,000. It has been decided by the directors to revalue it to fair value, which is assessed to be $38,000. The salvage value and useful life are considered to be unchanged. What are the appropriate entries to record the revaluation and the depreciation expense for the current year (rounded to the nearest dollar) ? A) B) C) D) E) None of the given answers.
E) None of the given answers.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q17: AASB 116 provides guidance on fair values

Q18: Smith & Jones Ltd owns equipment that

Q21: Mendelssons Ltd has a machine that has

Q27: Where there are debt covenants in place

Q28: Cars and Trucks Limited owns an engine

Q30: Casey Co Ltd is assessing the recoverable

Q34: If an asset is subject to depreciation

Q38: Entities that elect to report plant and

Q58: A class of non-current assets as defined

Q73: AASB 116 requires that revaluation increments and