Reference no: EM132605532

On 1 July 2008, Marina Ltd purchased a piece of land for $10,000,000 and a machine for $2,500,000. Marina Ltd decided to use the revaluation model to account for land and machine in accordance with AASB116 Property Plant and Equipment. For accounting and taxation purposes, the depreciation rate for the machine, is straight line over the expected life of 5 years. The tax rate is 30%.

Fair values for the following two (2) years were as shown below:

Asset

                               Fair value 30 June 2009                Fair value 30 June 2010

Land                        $11,000,000                            $9,500,000

Machine                  $1,900,000                               $1,500,000

Required:

Problem a) Prepare journal entries to record the revaluations on 30 June 2009 and 30 June 2010 for the Land. (Show all workings)

Problem b) Prepare journal entries to record the revaluations on 30 June 2009 and 30 June 2010 for the Machine. (Show all workings)