Issue 1 On 1 July 2021, we acquired an asset for $1,000,000, which it is depreciating using

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Issue 1 On 1 July 2021, we acquired an asset for $1,000,000, which it is depreciating using the straight-line method over 20 years (hence, $50,000 depreciation charged each year). We realised a further $200,000 was written off as impairment loss for the year ending 30 June 2023 in addition to $50,000 depreciation for the year in that year. (Recoverable amount of the asset at 30 June 2023 due to economic downturn was estimated to be $700,000). The board of directors are very concerned about writing off asset values like that and we would like to know whether the asset carrying amount can be increased in the future. Therefore, the directors are also wondering, whether impairment loss can be reversed. We were hoping by 30 June 2024, a favourable reassessment of the recoverable amount occurs as the world economy would be recovered. We would like to ask you to explain the reversal process, if recoverable amount of the asset is estimated to be $880,000 on 30 June 2024. In your explanation, please include the carrying amount of asset and journal entries for depreciation expense for the year ending 30 June 2024; and for the reversal. Issue 2 Our company operates profitably from a factory that it has leased under an operating lease. Annual lease rentals totaled $120,000. During the year ended 30 June 2023, we relocated its operations to a new factory. The lease on the old factory continues for the next four years (up to 30 June 2027), as it cannot be cancelled and the factory cannot be re-let to another user. ACC203 Advanced Financial Accounting Page 3 Assignment 3 Statement of Advice Document Classification: Public Can you advise, whether the closure of the plant shall be recognised in the financial statements of 2023. Also, let us know any amounts, which shall be recognised in its financial statements. Issue 3 Recently directors learnt about errors in accounting balances and the following new information became available: (a) The current tax provision of the prior year was understated by $50,000 based on the final self-assessed tax computation completed in the current year. (b) The write-down for an item of inventory in the prior year was determined to be overstated. The item was sold in the current year for an amount that exceeded its net realisable value by $20,000. (c) A machine with a cost of $110,000 and an accumulated depreciation of $20,000 at the end of the prior year was previously estimated to have a residual value of $10,000 and a useful life of ten (10) years. The current year estimates indicated that the residual value was nil and the useful life was eight (8) years. The company used the straight-line method for depreciation. Can you advise, whether (1) any adjustments are required, if so, (2) show the journal entries to effect the change in estimates. In addition, (3) any disclosure requirements of changes in Accounting Estimates so that we would have clear understanding on this matter.