1. On 30 May 2018, the Batman Ltd showed the following non-current assets after charging depreciation.

Plant $75,000

Less Accumulated depreciation 25,000

$50,000

Equipment $30,000

Less Accumulated depreciation 10,000

$20,000

Batman Ltd uses the fair value method for the valuation of non-current assets. The company hired an independent valuer on 30 May 2018 who assessed the fair value of the plant to be $40,000 and the equipment to be $22,500.

Required:

1. Prepare journal entries to revalue the plant and the equipment as at 30 May 2018.

Assume that the plant and equipment had remaining useful lives of 10 years and 5 years respectively, with zero residual value. Prepare journal entries to record depreciation expense for the year ended 30 May 2019 using the straight-line method