Reference no: EM132675566

Questions -

Q1. TAKULAH Traders Ltd purchased a machine for $650 000 and there was an accumulated depreciation balance of $110 000 at 30 June 2022. Its fair value is assessed at this time, with its first revaluation as $450 000. The machine's useful life is expected to be 5 more years and the residual value to be $50 000. On 1 July 2023 the asset's fair value is $460 000 and the residual value and useful life are expected to be unchanged (that is, there is 4 years of remaining life).

Required - Provide the journal entries necessary to account for all the above transactions and events up to 1 July 2023, in accordance with AASB 116 if the revaluation is undertaken.

Q2. Fitbit Ltd has leased a machine on the following terms: Date of entering lease 1 July 2019 Duration of lease 5 years Life of asset 6 years Unguaranteed residual value $40,000 Lease payments inception (at the start) $60,000 Annual payments (5) $65,000 Implied rate 11.0 %

Required - Determine the Fair Value (rounded off) of the leased asset.