A property was purchased on January 1 20x0 for $2 million (estimated depreciable amount $1 million-useful economic life 50 years) annual depreciation of $20,000 was charged from 20x0-20x4 inclusive and on January 1, 20x5 the carrying value of the property was $1.9 million. The property was revalued to $ 2.8 million on January 1, 2005 (estimated depreciable amount $1.35million-the estimated useful economic life was unchanged). Required: Show the treatment of the revaluation surplus and compute the revised annual depreciation charge.
A property was purchased on January 1 20x0 for $2 million (estimated depreciable amount $1 million-useful economic life 50 years) annual depreciation of $20,000 was charged from 20x0-20x4 inclusive and on January 1, 20x5 the carrying value of the property was $1.9 million. The property was revalued to $ 2.8 million on January 1, 2005 (estimated depreciable amount $1.35million-the estimated useful economic life was unchanged). Required: Show the treatment of the revaluation surplus and compute the revised annual depreciation charge.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A property was purchased on January 1 20x0 for $2 million (estimated
Required: Show the treatment of the revaluation surplus and compute the revised annual depreciation charge.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education