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PRACTISE+SETQUESTIONS+SESSION+THREE.doc

PRACTISE+SETQUESTIONS+SESSION+THREE.doc - FINANCIAL...

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FINANCIAL ACCOUNTABILITY AND REPORTING – PRACTISE SET SIM SEM 1 2014 SESSION ONE HOMEWORK QUESTIONS QUESTION 1 . HRC Ltd imported a machine from Singapore on 1 July 2009 at a cost of $200 000. The machine had an expected useful life of 10 years and the company adopts the straight- line basis of depreciation. HRC Ltd measures this asset at fair value. Movements in fair values were as follows: 30 June 2010 $189 000 remaining useful life 9 years 30 June 2011 $120 000 remaining useful life 8 years 30 June 2012 $70 000 remaining useful life 7 years REQUIRED: (a) Provide journal entries necessary to account for this machine for the financial years ending 30 June 2011, and 30 June 2012, in accordance with AASB116: Property, Plant, and Equipment . (b) Describe how an impairment loss for an individual asset may be reversed in accordance with AASB 136: Impairment of Assets . (max 100 words) QUESTION 2 Absolute Limited acquired Remote Limited on 1 July 2009 for cash of $8 000 000. At that date, Remote Limited’s net identifiable assets had a fair value of $5 900 000. The fair
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