QUESTION 3 (8 + 12 = 20 Marks)

a) On 1 July 2021, Mozart Ltd purchased three machines each used in a different production process in the factory. On 30 June 2022, there was an indication that the machines could be impaired due to a new competitor entering the market so Mozart Ltd determined the recoverable amounts of the machines. Information concerning the machines is summarised in the table below. Mozart Ltd uses straight-line depreciation over a 5 year period for all machinery. Assume that all three machines had nil residual values at the end of their useful lives.

Machine	Cost 1/7/21	Value in Use 30/6/22	Net Selling price 30/6/22
1	$10,000	$7,500	$9,000
2	$25,000	$13,000	$12,000
3	$15,000	$8,000	$9,500
	50,000

Required:

1) Record any depreciation for the year ended 30 June 2022.

2) Record any asset impairment at 30 June 2022.

b) Vivaldi had the following non-current asset balances in their general ledger at 31 December 2021.

Motor Vehicle at cost $33 000

Land at cost 150 000

The following transactions occurred during 2022.

June 30	Sold the motor vehicle that was purchased on 1 January 2019 for $33,000. It has a useful life of 6 years with no residual value. The vehicle was sold for $15,000 cash.
July 1	Revalued land held at cost of $150,000 to its fair value of $170,000.
Dec 31	The fair value of the land $170,000 has fallen due to a re-zoning of the area. Vivaldi Ltd decides to revalue the land to its revised fair value of $135,000.

Required:

Prepare the general journal entries required to record the transactions that occurred during 2022. Assume depreciation has been recorded up to 31 December 2021. Mozart Ltd uses straight-line depreciation.