SBM3108 Financial Accounting Assessment Question and Answer
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- Course Code: SBM3108
- Course Title: financial accounting
- Referencing Styles: Harvard
- Words: 2250
- University: Asia Pacific International College
- Country: AU
The assignment requires researching the legal environment of the Australian companies. The report should include:
- The key sources of financial reporting regulation in Australia and explain the roles played by the various regulatory bodies;
- Explain the critical components of the Conceptual Framework.
- Explain the qualitative characteristics of useful financial information and key elements of financial statements and Interpret and apply the principles for recognizing and measuring the financial statement parts.
On the December 31st, here reported 2019 annual report of Stela ltd, the equipment as follows:
Equipment (at cost) $300 000
Accumulated Depreciation $ 37 500
The equipment consists of two machines, Machine (A) and Machine (B). Machine (A) had cost $200 000 and had a carrying amount of $175 000 on December 31st, 2019, and Machine (B) had cost $100 000 and was carried at $87 500. Both machines are measured using the cost model and Depreciation on a straight-line basis over eight years.
On April 30th 2020, ABC Ltd’s directors decided to change the basis of measuring the equipment from the cost model to the revaluation model. Machine (A) was revalued to $160 000 with an expected useful life of 5 years, and Machine (B) was revalued to $70,000 with an expected life of 5 years.
On December 31st 2020, Machine (A) was assessed to have a fair value of $140 000 with an estimated life of 4 years and Machine (B)’s fair value was 60 000 with an expected useful life of 4 years.
Prepare the journal entries during the period January 1st 2020 to December 31st, 2020 in relation to the equipment (show all workings) Assuming accounting period Jan-Dec.