Diamond Ltd acquired an item of polishing equipment on 1 July 2015 for $440,000. The equipment is
expected to have a useful life of 10 years and the straight-line method of depreciation is to be used.
It has salvage value of $40,000. On 1 July 2017, the equipment is deemed to have a fair value of
$424,000 and revaluation is undertaken in accordance with the Diamond Ltd policy of measuring
property, plant and equipment at fair value. The asset is still usable for next 8 years but the salvage
value is determined to be zero. The asset is sold for $356,000 on 1 July 2019.
Required:
Provide the journal entries necessary at the following dates to account for the above transactions and
events. (Ignore narrations). Show your working. (10 marks)
• 01/07/2015
• 01/07/2017
• 01/07/2019