QUESTION 3 IGNORE TAX, VAT AND JOURNAL NARRATIONS (27 MARKS; 49 MINUTES) A Limited is a company that sells office furniture in the Cape Town region. As the sales of A Limited are increasing the company needed more storage space for the furniture and moved its furniture out of a warehouse property that it owns in Bellville, into a larger property on 30 June 2018. This Bellville property that it owned was then leased out on 30 June 2018 to an unrelated party under a non-cancellable operating lease. A Limited bought the warehouse property in Bellville on 1 January 2013 for R6 000 000. The land was valued at R2 000 000 and the building was valued at R4 000 000. The estimated useful life of the warehouse building was estimated to be 25 years and the residual value was estimated to be R1 000 000. On 31 December 2016 A Limited decided to revalue land and buildings for the first time and the fair value of the land was R3 000 000 and the fair value of the warehouse building was R3 000 000. Land and buildings that are classified as property, plant and equipment are measured under the revaluation model, using the gross replacement cost basis and are depreciated using the straight line basis. The useful life and residual value remained unchanged. The fair value of the land was R3 500 000 on 30 June 2018 and R3 600 000 on 31 December 2018. The fair value of the warehouse building was R3 800 000 on 30 June 2018 and R4 500 000 on 31 December 2018. A Limited measures investment properties under the fair value model.