(13 marks) Handy Distributors Inc. (HDI) includes a wholesale division and a retail division. Relevant information pertaining to its retail division (RET) is as follows:

- The net assets of RET were acquired by HDI in 20X1. HDI allocated $400,000 to goodwill upon acquisition.

- RET is a cash-generating unit (CGU). Its assets have not previously been impaired.

- HDI reports its financial results in accordance with IFRS.

- HDIs year end is December 31.

- RET uses the elimination method option of the revaluation model to report its land. It transfers the revaluation surplus, if any, to retained earnings only upon derecognition.

- RET depreciates all its depreciable assets annually on a straight-line basis. Part A

- Details of the Property, Plant and Equipment follow:

	LAND	BUILDINGS	EQUIPMENT	TOTAL PPE
purchase date	Jan 1 20X4	Jan 1 20X4	Jan 1 20X4
estimated useful life		20 years	5 years
estimated residual value		$0	$0
cost	$700,000	$1,600,000	$500,000	$2,800,000
revaluation at Dec 31 20X4	$690,000
revaluation at Dec 31 20X5	$730,000

RET rounds all depreciation calculations to the nearest dollar (for example, $21) and percentages to two decimal places (for example, 14.71%). You should do likewise in your supporting calculations.

Required: a) Calculate the annual depreciation of each asset held by RET for each of the 20X4 and 20X5 fiscal years. b) Provide the year-end adjusting journal entries pertaining to the revaluation of the land, and depreciation of the building and equipment for the 20X4 and 20X5 fiscal years. Ensure that the journal entries are dated and include a brief description of the pertinent details. Prepare a separate journal entry pertaining to each asset class. Supporting calculations are to be referenced or included in the description. Part B On January 1, 20X6, the Board of Directors of HDI decided to list RET for sale and determined that it met the criteria of a disposal group. Independent of Part A, assume that RET had previously used the cost model to value its property, plant and equipment. Following is the net book value of the various assets, together with their estimated fair value and other information:

	NBV Jan 1 20X6	Value in use Jan 1 20X6	FV Jan 1 20X6	Estimated costs of disposal	FV less disposal costs Jan 1 20X6
Land	$730,000		$730,000	$75,000	$655,000
Buildings	1,500,000		1,500,000	150,000	1,350,000
Equipment	290,000		290,000	15,000	275,000
Goodwill	400,000
Disposal group	$2,920,000	2,700,000	2,520,000	240,000	2,280,000

- HDI estimates that the value in use of the RET disposal group is $2,700,000.

- HDI estimates that the fair value of the RET disposal group is $2,520,000 and that the disposal costs will be approximately $240,000.

- On June 14, 20X6, HDI received $2,385,000 cash from the sale of the RET disposal group ($2,660,000 less a $275,000 sales commission). Required: Prepare a summary of the journal entries RET will need to make to record the boards decision to designate RET as a disposal group and to record its subsequent sale. Ensure that the journal entries are dated and include a brief description of the pertinent details. Supporting calculations are to be referenced or included in the description of each journal entry.