Kile Ltd purchased machinery on 1 July 2019 for $500 000. The useful life of the machinery was estimated to be 16 years (the residual value is zero). Kile Ltd also owns trucks that were acquired on 1 July 2019 for $250 000. The carrying amount of trucks at 30 June 2020 was $150 000. Kile Ltd uses the straight-line method of depreciation for all depreciable assets.

On 1 July 2020, Kile Ltd adopted the revaluation model in accordance with the requirements of AASB 116 and an independent valuer assessed the fair value of the machinery to be $450 000 and the trucks to be $185 000. The tax rate is 30%.

Required:

a) Prepare the journal entries required to account for the revaluation of the machinery and trucks at 1 July 2020. (11 marks)

b) On 30 June 2021, the fair value of the machinery was determined to be $430 000. Prepare any necessary journal entries to record the depreciation expense and revaluation of the machinery. Assume that there is no change in the remaining useful life of the machinery or to the residual value. (6 marks)