On 1 January 2018, ABC bought a grinding machine for Rs. 700,000. It has an expected useful life of 7 years and a nil residual value. On 30 September 2020, ABC decides to sell the machine and starts actions to locate a buyer. The machines are in short supply, so ABC is confident that the machine will be sold fairly quickly. Its market value at 30 September 2020 is Rs. 312,000 and it will cost Rs. 40,000 to dismantle the machine and make it available to the purchaser. The machine has not been sold at the year end.

Required:

a)      At what value should the machine be stated in ABC’s statement of financial position at 31 December 2020?

b)      Pass Journal Entries.