At the end of PrendorLtds financial year, 30^th June 2019, the following items must be resolved before adjusting entries and financial statements are prepared:

1. On 1^st July 2018, Prendor Ltd purchased a used machine for $65,000 cash. The cost was debited to the Machinery account in the ledger. Prior to use, additional expenses were incurred for installing and testing the machine. These costs amounted to $7,420 and were debited to the repairs and maintenance expenses account. The installation and testing was completed on 1^st October 2018, and the machine was brought into use on that date. The machine has an estimated useful life of 5 years, with a residual value of $6,000. Prendor uses straight-line depreciation for machinery and records depreciation to the nearest month. No depreciation has yet been provided in respect of this asset in the current year. (Show workings)

2. On 2^nd July 2018, a small building and land were purchased on for $350,000. The purchase price was determined by appraisers based on a fair value of $250,000 for the land, and $100,000 for the building. The total purchase consideration of $350,000 was debited to the land account. The building has an estimated useful life of 10 years with no residual. Prendor uses straight line depreciation for buildings. No depreciation has yet been provided for the building in the current year. On 30^th June 2019, Prendor decided to adopt the revaluation model and to measure its land and buildings at fair value in the balance sheet. A valuation was carried out on 30^th June 2019, and the land was valued at $295,000, and the building was valued at $120,000. No entries have yet been passed in relation to these fair values. (Show workings)

3. A new truck was purchased on 31^st March 2019. Prendor paid cash of $33,500 and also obtained a 12-month loan payable for the amount of $12,600 for the balance of the purchase price. The journal entry passed when the truck was purchased was to debit the Truck account $46,100, and credit cash $41,600. The truck has an estimated useful life of 4 years with a residual value of $13,300 and is to be depreciated using the reducing balance method (using a rate of 1.5 times the straight-line rate). No depreciation has yet been provided in respect of this asset in the current year. (Show workings)

REQUIRED:

Prepare journal entries (in general journal format) necessary to record the information given in the question (ignore GST):

1. Any adjusting or correcting entries required as at 30^th June 2019. [6 Marks]

2. Any entries necessary in respect of depreciation or any other adjustments required for each class of non-current assets discussed in the information given for the year ended 30^th June 2019. [14 Marks]