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Question 1 Plethora Ltd is preparing the financial statements for the year ending 31 December...

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Question 1 Plethora Ltd is preparing the financial statements for the year ending 31 December 2018 using IFRS. (a) Plethora has an administration building which it no longer needs. The building cost $600,000 on January 1, 2010 and is being depreciated over 50 years, based on the cost model. The management is looking to sell or rent the building, so Plethora reclassifies it as Investment Property, at fair value. Fair value as of December 31, 2018 is $800,000. (b) Plethora also owns a retail business which has suffered badly during the recession. Management treats this business as a separate cash generating unit. Continuing to operate the business would result in an estimated present value of $1.2 million net cash flows. Selling the business would be possible for an estimated at $1.3 million, and costs to sell of $0.05 million. The carrying amounts of the assets comprising the retail business are: in thousands Building $ 700 Equipment 300 Inventory 70 Other current assets 130 Goodwill 150 Required: Prepare the journal entries necessary to reflect the above situations at December 31, 2018

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