Required: (1) Provide a short introduction. (2) Provide and explain the journal entries for the business purchase on 1 July 2019. Refer to specific paragraphs in Australian accounting standards; (3) On 31 December 2019, the recoverable amount of the patent was $60,000, and theinventory acquired as part of the purchase has no retail value as it was damaged by a flood in December 2019. Provide and explain the journal entries for Aerodrone Limited to 31 December 2019. Refer to the specific paragraphs in the Australian standards for depreciation, amortisation, impairment and inventory;and (4) Aerodrone Limited adopts the revaluation method for its Factory Plant & Equipment from 1 July 2020. Due to the development of new digital technologies in the drone industry, the fair value has decreased to $500,000 while its value-in-use was estimated to be much higher. Explain Fair Value and Value-in-Use. Based on the Conceptual Framework, recommend which measurement basis to use. Narrations are not required. Length. You must keep the report to a maximum word length of 1,000 words (excluding the reference list).

Assessment Details Aerodrone Limited is purchasing a drone manufacturingbusiness for $1m on 1 July 2019 financed by a bank loan. After reviewing the business purchase contract and the balance sheet of the seller of the business you determine that your client is acquiring the following assets from the seller: Asset Cost Carrying Amount20,000 Fair value Remaininguseful life at 1/7/2019 Factory plant& equipment 1,500,000 1,000,000 800,000 Invento Patent 100,000 80,000 80,000 20,000 20,000 10 AerodroneLimited has been quoted legal costs associated with the purchase totalling $2,000 which will be invoiced and paid on 1 July 2019 You are asked to present your advice in the following format