XYZ Co. uses the revaluation model for its buildings. The last revaluation of the buildings to their fair value took place on December 31, 2018 XYZ provided you with the following information taken from its books on December 31, 2020: Building $ 1,200,000 Annual depreciation $ 100,000 Residual Value $ 120,000 Remaining useful life 11 on Dec 31, 2018 Accum OCI $ 25,000 Depreciation has been recorded to date On December 31, 2020, the building fair value is $960,000 The straight-line method of depreciation is used for buildings. Required: (a) Prepare all the journal entries related to the revaluation of the building in 2020. (b) Calculate the depreciation expense to be recorded on December 31, 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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XYZ Co. uses the revaluation model for its buildings. The last revaluation of the buildings to their fair value took place on December 31, 2018
XYZ provided you with the following information taken from its books on December 31, 2020:

Building		$ 1,200,000
Annual depreciation	$ 100,000
Residual Value	$ 120,000
Remaining useful life	11
on Dec 31, 2018
Accum OCI	$ 25,000

Depreciation has been recorded to date
On December 31, 2020, the building fair value is $960,000
The straight-line method of depreciation is used for buildings.

Required:
(a) Prepare all the journal entries related to the revaluation of the building in 2020.
(b) Calculate the depreciation expense to be recorded on December 31, 2021.

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