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)?
E) None of the given answers.

Question

Quizplus · Accepted Answer

The Answer of 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)?
E) None of the given answers.

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