Solutions pls

QUESTION 1 On 30 June 2016, Joy Ltd consults an accounting firm to determine the accounting treatment of the land and the buildings it holds. As a practitioner of the firm, you are asked to advise on the matter. You are provided with the following information: LAND BUILDINGS Cost of acquisition $2,000,000 $1,000,000 Date of acquisition 1 July 2010 1 July 2013 Evaluation method Cost model Fair value model Useful life 10 years Residual value $0 Value in use (at 30 June 2016) $2,400,000 Net selling price (at 30 June 2016) $2,500,000 Fair value (at 30 June 2016) $ 500,000 --- Additional information: The buildings have never been revalued in previous financial years. REQUIRED a) Complete the impairment test on the land on 30 June 2016 and provide the necessary journal entries based on the results of the impairment test. Justify your answer. b) Provide journal entries relative to the revaluation of the building for year ending 30 June 2016 (pay particular attention to the nature of the asset and ignore tax effects). c) Joy Ltd also consulted the accounting firm to be advised on the possibility to carry the land at fair value, instead of at cost, from the next financial year. After carrying out some research, you know that the fair value of the land at the 30 June 2016 is $2,600,000 and the land is located in a fast-developing area where the land prices are expected to increase in the next few years. Furthermore, you also know that the main debt holder of Joy Ltd - as part of its due diligence - reviews - the company's solvency as measured by the debt-to-assets ratio. In consideration of such circumstances, advise Joy Ltd about the implications of carrying land at fair value instead of at cost. Provide reasons for your