Anderson Pty Ltd is an Australian diversified
Subject: Business   / Accounting
Question
Anderson Pty Ltd is an Australian diversified industrial company with its major business activity being to manufacture flotation devices for babies and toddlers. Over the past decade, the business has been very profitable and the directors, Simon Anderson and Lisa Anderson, have kept payment of dividends to a minimum to allow the company to diversify into other activities. The following is a list of property, plant and equipment held by the company:
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Carrying Value ($)
Current fair value ($)
?Property, plant and equipment
?Factory (NSW)
?Land
100 000
150 000
?Buildings
?– Cost
70 000
80 000
?– Accumulated depreciation
(20 000)
–
Factory (Qld)
?Land
150 000
120 000
?Buildings
?– Cost
125 000
70 000
?– Accumulated depreciation
(45 000)
–
Mr Anderson informs you that the directors intend to revalue the property, plant and equipment during the year. The company has not revalued any assets in the past.
Required
(a) How would you account for the revaluation of the above assets?
(b) What would the relevant journal entries be?
