Eaglehawk Ltd had the following noncurrent asset on its balance sheet on 30 June 2015. The company adopts a policy of depreciating all relevant items on a straight-line basis at an annual rate of 10 per cent.

1. What is the carrying amount of the building on 1 January 2016?
2. On 1 January 2016, the directors of Eaglehawk decide to revalue the building to $400 000 to reflect its market value. Prepare the necessary journal entries.

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Building 200000 Accumulated depreciation (50000) 150000