1. Prepare the necessary general journal entries in relation to the buildings for the year ended 31 December 2020 and justify in accordance with appropriate accounting standards. Show all workings (narrations are not required). [6 marks]

Question 4 (16 marks) Rooey Ltd, the retailer of Zara clothing, is preparing its end of year financial statements at 31 December 2020. The balance sheet shows only two non-current assets, buildings and equipment. After depreciation entries were completed for the year ending 31 December 2020, the accumulated depreciation of its non-current assets were as follows: $ Buildings 24,200,000 Accumulated Depreciation (5,000,000) Equipment Accumulated Depreciation 7,000,000 (3,800,000) The company applies the revaluation model to buildings and the cost model to equipment. At 31 December 2020, the following values relating to the assets have been determined: Fair value Value in use Costs to sell Buildings $15,500,000 $15,600,000 $600,000 Equipment $1,700,000 $1,300,000 $300,000