Reference no: EM132737715

Question - On 30 June 2019, the statement of financial position of Indah Ltd showed the following non-current assets after charging depreciation:

Building (at cost) Accumulated Depreciation $300,000 (80,000) $220,000

Motor Vehicle (at cost) Accumulated Depreciation 120,000 (70,000) 50,000

The company has adopted fair value for the valuation of non-current assets. This has resulted in the recognition in previous period decrement of the motor vehicle of $5,000. The building was revalued upwards and has $2,800 balance in the Asset Revaluation Surplus account. On 30 June 2019, an independent valuer assessed the fair value of the building to be $210,000 and the vehicle to be $56,000. The remaining useful life of building and motor vehicle are 7 years and 5 years, respectively.

Due to a massive economic development in the area surrounding Indah Ltd, the fair value of buildings remains at $210,000 on 30 June 2020. The independent valuer also determines the fair value of motor vehicle at $44,000.

Additional information:

1. Indah Ltd depreciates its items of Property, Plant & Equipment (PPE) using a straight line method at 10% pa.

2. The income tax rate is 30%.

Required - Prepare necessary entries to revalue the building and the vehicle as at 30 June 2019 and 30 June 2020 in accordance to AASB 116 Property, Plant & Equipment. Show all workings and narrations.