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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Topic Video
Question
100%
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
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 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