Dragons Fire Pty Ltd is a business that manufactures and sells outdoor wood heaters. The business was formed on 1 July 2019. The land and building were purchased on 1 July 2019.

Prices of Building and Land as at 30 June 2021:

Cost of Building = $633,724.34

Less: Accumulated depreciation = $115,325.67 (Deprecation amount per year is $57,662.83)

Carrying Amount = $518,398.67

Cost of Land = $310,917.89

The company use straight-line depreciation method. In two year time on 30 June 2021, Dragons Fire Pty Ltd obtained an independent valuation of the land and buildings. The independent valuation indicated that the lands fair value was $300,000 and the buildings fair value was $620,000. The valuation report stated that the residual value of the building has been revised to $20,000 and is expected to last an additional 10 years.

Required:

1. Using the revaluation model calculate the revised amount that the building and land should be recorded at in the balance sheet for 30 June 2021. Include in your answer the general journal entries that need to be recorded to recognise the revised value of the building and land. Show your calculations.