ns land and property which cost $340,000 including $84,000 for the land on 1 January 20X3. Nina’s financial year ends on 31 December and depreciation is provided for using a straight line method. The building had a useful life of 20 years. On the 1 January 20X6, Nina revalued the land and buildings to their current value of $700,000 including $150,000 for the land.
ns land and property which cost $340,000 including $84,000 for the land on 1 January 20X3. Nina’s financial year ends on 31 December and depreciation is provided for using a straight line method. The building had a useful life of 20 years. On the 1 January 20X6, Nina revalued the land and buildings to their current value of $700,000 including $150,000 for the land.
Chapter9: Acquisitions Of Property
Section: Chapter Questions
Problem 22P
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Nina owns land and property which cost $340,000 including $84,000 for the land on 1 January 20X3. Nina’s financial year ends on 31 December and depreciation is provided for using a straight line method . The building had a useful life of 20 years.
On the 1 January 20X6, Nina revalued the land and buildings to their current value of $700,000 including $150,000 for the land. There were no changes to the remaining useful life of the building after revaluation.
What is the balance on the revaluation surplus account immediately after revaluation?
A. $411,200 B. $411,000 C. $398,400 D. $385,600
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT