1. valuation of land (give reasons and assess the impact on the ending balance sheet and income statement. You should refer to the relevant accounting standards to support your opinions. )

At the end of 2015, Portable Energy paid $80,000 for one acre of land on the outskirts of Dandenong South. An active market exists for similar pieces of land in the region; Portable Energy can access the markets at any time. Management believes the fair value estimate for the land should be classified as Level 1 in the fair value hierarchy. They are fairly certain that the land would not sell for less than $100,000, less selling costs of $5,000 and greenhouse removal costs of $2,000. As such, they propose that the land be reported at a fair value of $93,000, i.e., at

their assessment of its fair value less costs of disposal. The recent selling prices of land in the area are presented in Table 3.

(Assurance International, an audit firm, was hired to audit the company's financial statements for the year ending 30 June 2018. The financial statements will be prepared in accordance with Australia Accounting Standards; the monetary unit is the Australian dollars.

land, equipment, and greenhouses as separate asset classes. Since its inception, the company has used the cost model for valuing property, plant, and equipment. However, management now believes that the revaluation model for both land and equipment is more appropriate, under the presumption that fair value presents more relevant financial information to the potential investors.

TABLE 3 Valais Land Market (Active) Market/Region Price/Acre Dandenong $85,000 Springvale $60,000 Berwick $70,000TABLE 2 Operating Assets as Drafted by Management 2017 2018 Land (2017 at cost, 2018 at fair value) $80,000 $93,000 Production equipment (2017 at cost; 2018 at fair value) 120,000 180,151 Less accumulated depreciation (15,714) 0 Greenhouses, at cost 112,000 112,000 Less accumulated depreciation (25 years) (8,960) (13,440) Subtotal 287,326 371,711 Capitalized greenhouse costs: Growing environment 12,000 12,000 Dragon fruit seeds 2,000 2,000 Total greenhouse costs 14.000 14,000 Total operating assets 301,326 385,711