Reference no: EM133045662

Question - Petersen Ltd has the following land and buildings in its financial statements as at 30 June 2022:

Residential land, at cost $1,000,000

Factory land, at valuation 2020 $900,000

Buildings, at valuation 2020 $800,000

Accumulated depreciation $(100,000)

At 30 June 2022, the balance of the revaluation surplus is $400,000, of which $300,000 relates to the factory land and $100 000 to the buildings. On this same date, independent valuations of the land and buildings are obtained. In relation to the above assets, the assessed fair values at 30 June 2022 are:

Residential land, previously recorded at cost $1,100,000

Factory land, previously revalued in 2020 $700,000

Buildings, previously revalued in 2020 $900,000

Provide the journal entries to account for the revaluation on 30 June 2022. Petersen Ltd classifies the residential land and the factory land as different classes of assets.