As at 1 April 2015, the balance sheet of Super Estate Limited shows a piece of land at a value of $7,800,000. In previous years the company had recorded revaluation loss of $100,000 arising from revaluation of the land. The following market values of the land were determined by a professional valuation consultant: 

 

Year Ended	Market Value $
31March 2016	9,000,000
31March 2017	8,400,000
31March 2018	7,600,000
31March 2019	7,900,000

 

Required:

Prepare journal entries to record the revaluation of the land for the years ended 31 March 2016, 31 March 2017, 31 March 2018 and 31 March 2019. 

 

 

 

Part 2

Airlink Limited operates airport shuttle services in Hamilton. The following details of the company's vehicles used in shuttle services were extracted from the accounting records as at 1 January 2017:

 

 

Vehicles	$300,000
Accumulated Depreciation Vehicles	$30,000
Accumulated Impairment Vehicles	$6,000

 

The following information relates to the vehicles for the years ended 31 December 2017 and 31 December 2018:

 

Year ended 31December 2017:
Depreciation for the year ended 31 December 2017	$27,000
Net sales value as at 31 December 2017	$225,000
Value in use as at 31 December 2017	$245,000
Year ended 31 December 2018:
Depreciation for the year ended 31 December 2018	$21,000
Net sales value as at 31 December 2018	$215,000
Value in use as at 31 December 2018	$220,000

 

Required:

Calculate the impairment loss or reversal for each year ending 2017 and 2018

 

 

 

 

 

 

Part 3

The following details were extracted from the accounting records of Concord Limited as at 1/7/2017:

 

Items of Non- Current Assets	$
Land	8,000,000
10 storey Building	13,000,000
Vehicles	350,000
Accumulated Depreciation Vehicles	80,000
Revaluation surplus	2,000,000

 

The revaluation surplus as at 1/7/2017 is related to revaluation of land in previous years. Building was re-valued for the first time in June 2017 and a revaluation loss of $400,000 was recorded for the financial year ended 30/6/2017. Depreciation of non-current assets is calculated using the following basis:

 

Land	No depreciation
10 Storey Building	2% straight-line
Vehicles	10% reducing balance

 

Vehicles are used for transporting goods from suppliers. An old vehicle with a book value of $30,000 (original historical cost) and accumulated depreciation of $15,000 as at 1/7/2017 was traded-in at a value of $10,000 for the purchase of a new vehicle on 1/7/2017 The purchase price of the new vehicle was $55,000. The balance of the purchase price was settled in cash. The following information relating to revaluation and impairment of the non-current assets was gathered on 30/6/2018:

 

	Market value	Net sales value	Value in use
Land	12,000,000	-	-
10 Storey Building	13, 800,000	-	-
Vehicles		270,000	260,000

 

The financial year end of Concord Limited is 30^th June.

 

Required

Prepare journal entries (without narrations) to record the following:

1. Revaluation of land as at 30/6/2018 

 

                                                

1. Depreciation of the 10 Storey building for the year ended 30/6/2018

 

            

1. Revaluation of 10 Storey Building as at 30/6/2018                          

 

 

1. The purchase of the new vehicle and disposal of the old vehicle on 1/7/2017.     

 

Answer rating: 100% (QA)

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