Gemart Ltd acquired a printing machine on 1 July 2014 for $200,000. It is expected to have a useful life of 5 years, with the benefits being derived on a straight-line basis. The residual value is expected to be $nil.

Additional information:

1. On 1 July 2016 the machine is deemed to have a fair value of $150,000 and a revaluation is undertaken in accordance with Gemart Ltds policy of measuring property, plant and equipment at fair value.

2. On 1 July 2018 the asset is sold for $120,000.

3. Genmart Ltd prepares a single income statement. Genmart Ltd has always adopted the revaluation model for the machinery class of assets.

4. Ignore the taxation impact of transactions and events.

Required:

(a) Provide the journal entries necessary to account for the above transactions and events from 1 July 2017 to 30 June 2019.

(b) If Genmart was using the cost model, explain the effect on profits when the asset was sold on 1 July 2018.