Rhys is the owner of Venturin Meat Supplies. Venturin Meat Supplies' adjusted trial balance at 31 December 2016 (end of the reporting period) included the following balances:Processing Plant (at cost; purchased 10 April 2013) $148 650Accumulated Depreciation – Processing Plant 109 135Trucks Control (at cost) 291 400Accumulated Depreciation Control – Trucks 174 200The Trucks Control and Accumulated Depreciation Control – Trucks accounts are supported by subsidiary ledgers. Details of trucks owned at 31 December 2016 are as follows: Truck Purchase Date Cost Est. Useful Life Est Residual Value1 25 August 2013 $61000 4 years $3 4002 05 March 2014 $70600 4 years $3 4003 02 August 2014 $75600 4 years $3 6004 23 October 2014 $84200 5 years $3 200Additional information: Rhys uses the general journal for all entries, calculates depreciation to the nearest month, balances his accounts 6-monthly, and records amounts to the nearest dollar. Rhys uses straight-line depreciation for all depreciable assets except the processing plant, which is depreciated at 30% p.a. on the diminishing balance.The following transactions and events occurred during 2017:January 27 Traded-in Truck 1 for a new truck (Truck 1A) which cost $84 100. A trade-in allowance of $10 200 was received and the balance was paid in cash. Registration and painting costs of $1500 were also paid in cash. Rhys estimated Truck 1A's useful life and residual value at 5 years and $4600.June 02 Modernised the processing plant at a cash cost of $61 574. Although the modernisation significantly expanded the plant's operating capability and efficiency,Rhys decided that no revision to the depreciation rate was warranted.July 24 : Sold Truck 3 for $25 000 in cash. September 24 :Exchanged Truck 2 (fair value at exchange date: $10 640) for computer equipment. The computer equipment's fair value was $10 550 at exchange date. The computer equipment originally cost $26 600 and had been depreciated in the previous owner's accounts by $15 850 to date of exchange. Rhys estimated the computer equipment's useful life and residual value at 4 years and $320.December 31: Recorded Depreciation Required:(a)Prepare journal entries to record the above transactions and events. (Narrations are not required.)(b)Prepare the Processing Plant and Accumulated Depreciation Control – Trucks general ledger accounts for the period 1 January 2017 to 31 December 2017.PART CAC Toys Pty Ltd (AC Toys) acquired an item of plant and equipment with a fair value of $500,000 on 30 June 20X7 via a non-cancellable finance lease. The terms of the lease are as follows: ten equal annual payments of $100,000 (excluding GST) to be made in advance (the first instalment was paid on 30 June 20X7) interest rate implicit in the lease is 20.24183% Estimated useful life of the asset is 10 years. Straight-line depreciation method to be used Present value of minimum lease payments (PVMLP) at 30 June 20X7 is $500,000.Required:(a)Prepare the journal entries necessary for a manufacturer or dealer lease in the accounts of the lessor for the financial years ended 30 June 20X7 and 30 June 20X8. (Assume that the cost of the asset to the lessor was $450,000.)(b)Using the same information as for part (a) above, and assuming that the carrying value of the asset is $500,000 in the lessor's books, prepare the journal entries necessary for a finance lease in the accounts of a lessor that is not a manufacturer or dealer for the financial years ended 30 June 20X7 and 30 June 20X8.PART DBiloba Limited (Biloba) has three divisions, A, B and C, which operate independently of each other to produce medical products. The company has headquarters and a research centre that are located in Brisbane, with the three divisions being located in regional Queensland. The research centre, which has only recently been established, interacts with all the divisions to improve both products and processes.There is not yet any basis on which to determine how the work of the research centre will be allocated to each of the three divisions, as that will depend on the priorities of the company overall and on issues that arise in each of the divisions. The company headquarters provides approximately equal services to each of the divisions, but an immaterial amount to the research centre. Neither the headquarters nor the research centre generates cash inflows.On 30 June 20X8, the net assets of Biloba were as follows: Management of Biloba believes that there are economic indicators to suggest that the company's assets may have been impaired. Accordingly, they have had value in use assessed for each of the divisions as follows:Division A $1,550,000Division B $1,000,000Division C $750,000Required:Determine how Biloba should account for any impairment of the entity. Justify your decisions and complete any required journal entries.PART EBackground InformationLone Ranger Limited (Lone Ranger) is a listed entity that prepares consolidated financial statements. It sells new motor vehicles in various locations in Australia and provides after-sale motor vehicle servicing.Lone Ranger owns 30% of the ordinary shares of Tonto Limited (Tonto), which provides Lone Ranger with significant influence over Tonto. Tonto sells spare parts to Lone Ranger, which are used in LoneRanger's service centres.Cavendish Limited (Cavendish) is unrelated to Lone Ranger and owns 35% of Tonto's ordinary shares. Tonto's remaining shareholdings are dispersed among thousands of smaller investors. In Tonto's previous shareholder meetings, shareholder groups have not acted together and there are no arrangements in place to make collective decisions. Cavendish has the power to block decisions concerning the refinancing of Tonto's long-term borrowings.Voting rights in Tonto are in accordance with ordinary shareholdings.Part E.1Required:Explain whether Cavendish controls Tonto. Justify your answer with reference to specific paragraph(s) in AASB 10 Consolidated Financial Statements.Part E.2When Lone Ranger acquired its 30% interest in Tonto for $210,000 on 1 July 20X2 (which gave Lone Ranger significant influence over Tonto), the associate's recorded identifiable net assets were represented by the following:Tonto's net assets at 1 July 20X2Item $Share capital 800,000Retained earnings (300,000)Total equity 500,000All assets and liabilities were stated at fair value, except for a recognised intangible asset that was understated by $200,000. This asset is being amortised over its remaining useful life of 10 years.Movements in the associate's equity since 1 July 20X2, as recorded by Tonto, are as follows:Tonto's movements in equity for the years ended 30 June 20X3 and 20X4Item 20X3 20X4 $ $Profit before income tax 110,000 130,000Income tax expense (30,000) (39,000)Profit for the period 80,000 91,000Revaluation surplus 0 150,000Movement in equity 80,000 241,000Purchases of spare parts inventory by Lone Ranger from Tonto at cost plus 40%Year end Total purchases in the year Held in inventory at year end $ $30.06.X3 300,000 84,00030.06.X4 340,000 98,000Spare parts are used by Lone Ranger in servicing cars within 60 days of purchase.On 30 June 20X4, Lone Ranger acquired an additional 35% interest in Tonto. At this date, the fair value of its original investment in Tonto was $320,000.The tax rate for both Lone Ranger and Tonto is 30%Part E.2Required:(a)Calculate the share of Tonto's:•current year profit•post-acquisition opening retained earnings•post-acquisition reserves that Lone Ranger should recognise under the equity accounting method when Lone Ranger prepares its consolidated financial statements for the year ended 30 June 20X4. You are not required to prepare journal entries.(b)Assume that Lone Ranger controls Tonto once 65% of voting rights are held. Calculate the gain or loss on remeasuring the 30% interest held in Tonto that will be recognised in accordance with AASB 3 Business Combinations when Lone Ranger gains control of Tonto on 30 June 20X4.(c)Identify whether the gain or loss calculated in (b) should be recognised in the statement of profit or loss or in other comprehensive income within Lone Ranger's consolidated financial statements.Justify your selection with a specific reference to the relevant Accounting Standards.