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Shiver Ltd uses the cost model for machinery Purchased on 1 July 2011 The useful life of machinery was 10 years and Shiver depreciated the machinery on a straight line basis with no residual value

Shiver Ltd uses the cost model for machinery (Purchased on 1 July 2011). The useful life of machinery was 10 years, and Shiver depreciated the machinery on a straight line basis with no residual value. On 1 July 2014 Shiver had the following data: Machinery $200,000 Less accumulated depreciation 60,000 Carrying amount 140,000 Prepare the general journal entries

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Shiver Ltd uses the cost model for machinery (Purchased on 1 July 2011). The useful life of machinery was 10 years, and Shiver depreciated the machinery on a straight line basis with no residual value. On 1 July 2014 Shiver had the following data: Machinery                                     $200,000 Less accumulated depreciation     60,000 Carrying amount                              140,000 Prepare the general journal entries for the following: The useful life was revised from 10 years to 8 years on 30 June 2015 at the end of the current reporting period (this change is classed as material). No depreciation has been provided in the current period. 1 July 2015 recognition of impairment loss on machinery of $10,000. 1 July 2015 recognition of reversal of impairment loss on machinery of $15,000. Explain the difference in the accounting treatment for revaluation increments and revaluation decrements. Do you consider that this difference is ‘conceptually sound’?

May 21 2020 View more View Less

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