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Question - John Ltd adopts the revaluation model for measuring buildings. On 30 June 2021, and prior to recording depreciation for the year, John Ltd obtained a fair value for a building at $240,000.
In the previous year, John Ltd had revalued this building to a fair value of $300,000. This had resulted in recording an increase of $20,000 for the building. The building had a remaining useful life of 10 years on that date (no residual value).
The company uses straight-line depreciation, the reporting period ends 30 June, and the tax rate is 30%.
Required - Prepare the necessary journal entries for the building on 30 June 2021. Show any workings.
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