On 1 July 2015, Mars Ltd purchased land $1 200 000 and buildings $500 000. The estimated useful life of the buildings was 40 years, with a residual value of nil. On 1 October 2015, machinery was purchased at a total cost of $120 000. The estimated useful life of the machinery was 4 years with an estimated residual value of $9000. Mars Ltd uses straight-line depreciation for buildings and the diminishing-balance method for machinery at a rate of 48%. The entity’s reporting period ends on 30 June. 

Required

(a) Prepare journal entries to record the purchase of the land, buildings and machinery during the year.

(b) Prepare journal entries to record the depreciation expense for the year ended 30 June 2016.

(c) Assume that on 1 July 2016 the entity revalued the land upwards by $200 000 and the buildings downwards by $25 000. Prepare the journal entries for the revaluations.

(d) On 31 December 2016, owing to a change in product mix, the machinery was sold for $50 000. Prepare the journal entry(ies) to dispose of the machinery.