Question
On 1 January 2015, Selector Ltd purchased buildings for $4,000,000. Buildings are valued using the cost basis of measurement. Buildings are depreciated on a straight
On 1 January 2015, Selector Ltd purchased buildings for $4,000,000. Buildings are valued using the cost basis of measurement. Buildings are depreciated on a straight line basis over 25 years, with zero residual value.
On 1 January 2017, Selector Ltd purchased land for $3,000,000.
Land is valued using the fair value basis of measurement.
On 31 December 2018: (i) The fair value of land is $2,750,000. (ii) The net selling price of the buildings is $3,100,000, and the value in use of buildings is $3,150,000.
On 31 December 2019: (i) The fair value of land is $3,300,000. (ii) The net selling price of the buildings is $3,120,000, and the value in use of buildings is $3,070,000.
On 1 January 2020, the buildings were sold for $3,200,000.
REQUIRED: Provide all journal entries necessary to account for the land and buildings of Selector Ltd, from 1 January 2018 to 1 January 2020, in accordance with the requirements of AASB 116: Property, Plant and Equipment and AASB 136: Impairment of Assets. Provide all explanations and workings necessary to support your answer.
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