As at June 2012, Apple owns an item of machinery. The machine is measured using the cost model, its carrying amount is $220,000 (original cost ($352,000) and its estimated remaining life is 5 years.

Managers have inspected the machinery and taken into account economic conditions, which indicate possible impairment, and carry out testing for impairment

The information below shows the asset values at various dates.

Date	Fair value less costs to sell	Future cash flows
30/06/12	$78,000.00	$-
30/06/13	$75,000.00	$44,300.00
30/06/14	$59,000.00	$42,900.00
30/06/15	$43,000.00	$41,100.00
30/06/16	$25,000.00	$49,450.00
30/06/17	$3,000.00	$50,650.00

The pre-tax discount rate for calculations of recoverable amount is 10%. Depreciation method is straight line. No impairment for the 2013/2014 year is indicated. Apple Ltd improves the performance of the machinery at the beginning of the 2014/2015 year, at a cost of $50,000. The same discount rate can still be used. The asset value information is adjusted as follows:

Date	Fair value less costs to sell	Future cash flows
30/06/14	$80,000.00	$-
30/06/15	$75,000.00	$69,900.00
30/06/16	$48,000.00	$66,100.00
30/06/17	$29,000.00	$59,450.00

Prepare general journal entries to account for the machinery from 1 July 2012 to 30 June 2014 in accordance with the requirements of AASB 116 and AASB 136. (12 marks)

Please show all workings.

QUESTION 1 (15 MARKS) (a) As at June 2012, Salisbury Ltd owns an item of machinery. The machine is measured using the cost model, its carrying amount is $220,000 (original cost ($352,000) and its estimated remaining life is 5 years. Managers have inspected the machinery and taken into account economic conditions, which indicate possible impairment, and carry out testing for impairment The information below shows the asset values at various dates. Date 30/06/12 30/06/13 30/06/14 30/06/15 30/06/16 30/06/17 Fair value less costs to sell $78,000.00 $75,000.00 $59,000.00 $43,000.00 $25,000.00 $3,000.00 Future cash flows $$44,300.00 $42,900.00 $41,100.00 $49,450.00 $50,650.00 The pre-tax discount rate for calculations of recoverable amount is 10%. Depreciation method is straight line. No impairment for the 2013/2014 year is indicated. Salisbury Ltd improves the performance of the machinery at the beginning of the 2014/2015 year, at a cost of $50,000. The same discount rate can still be used. The asset value information is adjusted as follows: Date 30/06/14 30/06/15 30/06/16 30/06/17 Fair value less costs to sell $80,000.00 $75,000.00 $48,000.00 $29,000.00 Future cash flows $$69,900.00 $66,100.00 $59,450.00 Prepare general journal entries to account for the machinery from 1 July 2012 to 30 June 2014 in accordance with the requirements of AASB 116 and AASB 136. (12 marks) Please show all workings