Endless Summer Ltd purchased two parcels of land (Bruce and Brown) for $2 000 000 each on
Question:
Endless Summer Ltd purchased two parcels of land (Bruce and Brown) for $2 000 000 each on 1 July 2020. Subsequent to initial measurement, Endless Summer revalued the land. Fair values are as follows:
REQUIRED
a. Prepare journal entries to record the revaluations on 30 June 2021 and 30 June 2022.
b. The manager claims, ‘There should be no adjustment for the decline in fair value because the recoverable amount of each parcel of land exceeds $2 000 000 at 30 June 2022’. Explain whether this is consistent with accounting standards.
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a To prepare the journal entries for the revaluations on 30 June 2021 and 30 June 2022 we need to ac...View the full answer
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