(a) Do you think that there are implications of the revaluation increments (upward revaluation) and revaluation decrements (downward revaluation) on firms' profit?

(b) On 30 June 2020, the Mildura Ltd showed the following non-current assets after charging depreciation.

Plant $150,000

Less Accumulated depreciation50,000

$100,000

Equipment $60,000

Less Accumulated depreciation20,000

$40,000

Mildura Ltd uses the fair value method for the valuation of non-current assets. The company hired an independent valuer on 30 June 2020 who assessed the fair value of the plant to be $80,000 and the equipment to be $45,000.

Required:

(i)Prepare journal entries to revalue the plant and the equipment as at 30 June 2020.

Assume that the plant and equipment had remaining useful lives of 10 years and 5 years respectively, with zero residual value. Prepare journal entries to record depreciation expense for the year ended 30 June 2021 using the straight-line method.