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1.7 Sample Reval Problem 2

,HNVNVV MMMMB MNNHNHKHH VCFXSSSFD

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Daisy Continente
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63 views1 page

1.7 Sample Reval Problem 2

,HNVNVV MMMMB MNNHNHKHH VCFXSSSFD

Uploaded by

Daisy Continente
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

GIVEN: COST REPLACEMENT

EQUIPMENT 6,500,000 9,200,000 DATE OF ACQ JAN1, 2019


RESIDUAL VALUE 500,000 200,000
ACCUMULATED DEPRECIATION 1,000,000 (c-sv)/eul DATE OF REVALUATION JAN 1, 2021
AGE OF ASSET YEARS 2
USEFUL LIFE OF ASSET YEARS 12

COST REPLACEMENT VARIANCE


EQUIPMENT 6,500,000 9,200,000 2,700,000
Less: Residual value 200,000 200,000 -
Depreciable cost 6,300,000 9,000,000 2,700,000
LESS: ACC DEP'N 16.67% 1,000,000 1,500,000 500,000
BOOK VALUE 5,300,000 7,500,000 2,200,000 2,200,000

1 UPON REVALUATION (JANUARY 1, 2021)


EQUIPMENT 2,700,000
ACCUMULATED DEPRECIATION 500,000
REVALUATION SURPLUS 2,200,000

DEPRECIATION FOR 2021 (DEC 31, 2021) PIECEMEAL REALIZATION


DEX =( C - SV)/EUL Revaluation surplus, 1/1/21 2,200,000
= (RBV - SV)/REUL Divided by: Rem EUL 10
Realizatiion 220,000
Remaining book value, 1/1/21 7,500,000
Divided by: RemainingEUL (12-2) 10 Revaluation surplus 220,000
Depreciation per year 750,000 Retained earnings 220,000

Depreciation expense 750,000 BALANCE OF REVALUATION SURPLUS, 12/31/21


Accumulated depreciation 750,000 Revaluation surplus, 1/1/21 2,200,000
Less: Piecemeal real 220,000
CARRYING VALUE , 12/31/21 Revaluation surplus, 12/31/21 1,980,000
Cost 9,200,000
less: Accum. Dep 2,250,000
Book value/Carrying value 6,950,000

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