QUESTION $1(27$ marks$)$

Multiforce $($Pty$)$ Ltd is a manufacturer of various vitamins and supplements, and the

company has a $30$ June financial year$-$end.

Due to the growth the company experienced over the past $12$ months and the expansion of its product line, Multiforce $($Pty$)$ Ltd had to acquire a new, bigger building to run

its operations.

The Financial Manager, therefore, proposed that the old building must be sold as soon

as possible. On $31$ May $2024,$ the board of directors approved the proposal and started

advertising the building for sale immediately. All criteria for the classification as held

for sale, in accordance with IFRS $5$: Non$-$current Assets Held for Sale and Discontinued Operations, were met on $31$ May $2024.$

The building was initially acquired on $31$ May $2018$ at a cost of R$6000000.$ The value

of the land was deemed to be insignificant, and the building was available for use as

intended by management on $31$ May $2018.$ The building was depreciated on a straightline basis over an estimated useful life of $20$ years with a nil residual value. The building was accounted for in accordance with the cost model under IAS $16$: Property, Plant

and Equipment.

On $30$ June $2023,$ an impairment loss of R$1400000$ was recognised in respect of the

building in accordance with IAS $36$: Impairment of Assets.

The following values were applicable to the building on the respective dates:

Fair value Costs to sell

$31$ May $2024$ R$3000000$ R$200000$

$30$ June $2024$ R$3250000$ R$220000$

REQUIRED:

Prepare the general journal entries required to account for the old building in the records of Multiforce $($Pty$)$ Ltd for the financial year ended $30$ June $2024.$

$$ Round all calculated amounts to the nearest Rand where applicable.

$$ Include journal dates.

$$ Exclude journal narrations.

$$ Ignore any$/$all tax implications.