Problem
On 1 July 2023, Herd Ltd. acquired a machine for $230,000 and decided to depreciate it for 20 years with no residual amount. The tax rate is 25%. For tax purposes, the machine has a 10% depreciation rate and no residual amount. Assume that the fair values of this asset were:
Date Fair Value
1/7/2023 $240,000
31/8/2023 $250,000
30/6/2024 $230,000
Task
Using the revaluation model, prepare the relevant journal entries from the date of acquisition to 30 June 2024, including tax effects.