On Jan. 1, 2015, ABC Leasing Inc. acquired a building for a total capitalizable cost of P20,000,000. It is being depreciated over 25 years to a salvage value of P4,000,000. On Jan. 1, 2021, ABC revalued the old building. Creating the same building now would cost P25,000,000. The old building can be used for 20 more years as of this date. By the end of its useful life, it can be sold for P5,000,000. How much is the revaluation surplus to be reported on the Statement of Financial Position as of Dec. 31, 2025 assuming that ABC records piecemeal realization of the Revaluation Surplus?
On Jan. 1, 2015, ABC Leasing Inc. acquired a building for a total capitalizable cost of P20,000,000. It is being depreciated over 25 years to a salvage value of P4,000,000. On Jan. 1, 2021, ABC revalued the old building. Creating the same building now would cost P25,000,000. The old building can be used for 20 more years as of this date. By the end of its useful life, it can be sold for P5,000,000. How much is the revaluation surplus to be reported on the Statement of Financial Position as of Dec. 31, 2025 assuming that ABC records piecemeal realization of the Revaluation Surplus?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On Jan. 1, 2015, ABC Leasing Inc. acquired a building for a total capitalizable cost of P20,000,000. It is being depreciated over 25 years to a salvage value of P4,000,000.
On Jan. 1, 2021, ABC revalued the old building. Creating the same building now would cost P25,000,000. The old building can be used for 20 more years as of this date. By the end of its useful life, it can be sold for P5,000,000.
How much is the revaluation surplus to be reported on the Statement of Financial Position as of Dec. 31, 2025 assuming that ABC records piecemeal realization of the Revaluation Surplus?
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