ABC company build a new production line for making cloths on 1 April 2017. The construction was completed on 1 July 2017 and the production line was operated once it had completed. The following costs were incufred $'000 22,500 Purchase of materials (after deducting trade discount of 10%) Labor costs incurred during construction for three months to 30 June 2,400 2017 Overheads directly incurred during construction (note 1) Consulting fee related to the construction Expected dismantling costs (note 2) 1,800 1,000 4,000 Notes: 1 The overheads include a $600,000 cost due to correction of design error 2 The production line is expected last for ten years. ABC company is required to dismantle it due to legal requirement at the end. $4,000,000 dismantling cost is estimated at the end of the useful life of the production line. Assume 5% discount rate is used 3 After five years, ABC company believes it need to conduct the major overhaul to ensure the production line generates economic benefit for the next five years. The cost of overhaul is estimated $6,000,000 at 1 April 2017. 5 Depreciation is determined on a monthly basis 6 Revaluation model of IAS 16 is applied to all of machinery. On 31 March 2018, the fair value of production line is S35,000,000 Calculate the initial cost of the production line on 1 July 2017 Prepare journal entries needed to account the depreciation and revaluation of the production on 31 March 2018 a. b