FINANCIAL ACCOUNTING Question:
Revaluation of Property, Plant and Equipment.
Rosen Ltd has a policy of revaluing its motor vehicles to fair value. The details at 30 June 20X4 relating to Rosen Ltd's motor vehicles, which has previously been revalued upwards by $5000 are as follows:
Motor Vehicles- $48,000
Less: Accum Dep- $12,000
Carrying Amount $36,000
At the date of the revaluation increment (1 July 20X3) the vehicles had a zero residual value and a useful life of 4 years. Depreciation has been calculated using the straight-line method. On 31 December 20X4, Rosen Ltd was informed that the fair value for the vehicles was $23,000. The useful life has not changed. At 30 June 20X5, the carrying amounts are not materially different from fair values.
Required:
i) Prepare the necessary journal entries at 31 Dec 20X4.
ii) Calculate the depreciation expense at 30 June 20X5.