Q1. As at 1 July 2020, Fay Ltd has a piece of land that originally cost $400 000. Fay decided on 1 July 2020 that the item should be revalued to its fair value, which was assessed as $450 000.

Provide the journal entries to record the acquisition and the revaluation of the land

Q2. As at 1 July 2020, Farrelly Ltd owns an item of machinery which costed $40 000 and has accumulated depreciation of $15,000. Its remaining life is 5 years with no residual value. On 1 July 2020 Farrelly decided that the item should be revalued to its fair value, which was assessed as $45 000.

1.How much is the carrying amount?

2.How much is the revaluation increment/decrement that has to be made?

3.How do you account for the revaluation?

4.Any changes in the depreciation expense?