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On 1 July 2009, Chifley Ltd acquired 2 assets within the same class of plant & equipment. Information on these assets is as follows: Machine A cost $100,000 and expected useful life 5 years Machine

On 1 July 2009, Chifley Ltd acquired 2 assets within the same class of plant & equipment. Information on these assets is as follows:

Machine A cost $100,000 and expected useful life 5 years
Machine B cost $60,000 and expected useful life 3 years

The machines are expected to generate benefits evenly over their useful lives. The class of plant and equipment is measured using fair value.

At 30 June 2010, information about the assets is as follows:

Machine A has fair value of $84,000 and estimated useful life 4 years
Machine B has fair value of $38,000 and estimated useful life 2 years

On 1 January 2011, Machine B was sold for $29,000 cash. At 30 June 2011, information on Machine A is as follows:

Machine A has fair value $58,000 and estimated useful life 3 years

Required:

Prepare journal entries in the records of Chifley Ltd to record the described events over the period 1 July 2009 to 30 June 2011.

Aug 17 2021 View more View Less

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