prepare journal entries to record revaluation of building on 1 july 2016 prepare journal entries to record the revaluation of the building on 30june 2017

QUESTION 3 The accountants of Roxy Ltd had been using the cost model to measure the building that was used to house its 20 employees. After consultation with the local real estate agent the accountant realised that buildings in that area had been increasing in value. As a result, and after consultation with management, on 1 July 2016 the accountant changed the measurement for the building to the revaluation model and obtained a fair value on that date of $932,000 Total: 15 Marks The day before this change, 30 June 2016, Roxy Ltd had prepared its end of financial year reports, showing the following for the building: Building (at cost) Accumulated depreciation-building $950,000 (90,000) Question 3 continued over the page Question 3 continued Additional information The building had been purchased residual value of $50,000 July 2 on 1 July 2014 with a useful life of 20 years, and a Roxy Ltd reporting period ends 30 June The tax rate is 30% Required a) Prepare any necessary journal al entries to record the revaluation of the building on 1 record the (6 marks) July 2016. Show all working out obtained a fair value for the building of $870,000. Prepare of the building on 30 June b) On 30 June 2017, Roxy Ltd fair value any necessary journal entries to record the reval 2017. Show all working out. (9 marks) Total: 10 Marks