On January 1, 2022, Alma Company showed land with carrying amount of P10,000,000 and building with cost of P60,000,000 and accumulated depreciation of P18,000,000. The land and building were revalued on the same date and revealed the fair value of land at P15,000,000 and the building at P70,000,000. The original useful life of the building is 20 years and depreciation is computed on the straight line. The income tax rate is 30%. What is the revaluation surplus on December 31, 2022? A. 33,000,000 185 points Due Apr 26. 12:00 B. 23,100,000 C. 21,450,000 D. 21,700,000

On January 1, 2022, Alma Company showed land with carrying amount of P10,000,000 and building with cost of P60,000,000 and accumulated depreciation of P18,000,000. The land and building were revalued on the same date and revealed the fair value of land at P15,000,000 and the building at P70,000,000. The original useful life of the building is 20 years and depreciation is computed on the straight line. The income tax rate is 30%. What is the revaluation surplus on December 31, 2022? A. 33,000,000 185 points Due Apr 26. 12:00 B. 23,100,000 C. 21,450,000 D. 21,700,000

Name: On January 1, 2022, Alma Company showed land with carrying amount of
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: On January 1, 2022, Alma Company showed land with carrying amount of P10,000,000 and building with cost ofP60,000,000 and accumulated depreciation of P18,000,000. The land and building were revalued on the same dateand revealed the fair value of lan

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 7E: Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for...

See similar textbooks

Related questions

Q: udds Company purchased a new plant asset on April 1, 2020, at a cost of $711,000. It was estimated…

A: The depreciation expense is charged on fixed assets as reduction in the value of the fixed assets…

Q: Coachwhip Corporation purchased a machinery on January 1, 2022 for P5,000,000. The same had an…

A: Answer) Calculation of Revaluation Surplus Revaluation Surplus = Fair Value of Equipment on January…

Q: On January 2, 2022, Baker Company purchased land that cost $790,000, a building on the land that…

A: The depreciation expense is charged on the fixed assets as a reduction in the value of the fixed…

Q: On December 31, 2022, Tamarisk Inc. owns a machine with a carrying amount of $744, 000. The original…

A: Journal entries are made to record the transactions as the first process in the books of accounts…

Q: Parnell Company acquired construction equipment on January 1, 2023, at a cost of $77,000. The…

A: A journal entry is used to record a corporate transaction in the accounting records of a company. A…

Q: On January 1, 2020, DAHLIA Company showed land with a carrying amount of ₱10,000,000 and building…

A: The question is multiple choice question Required Choose the Correct Option.

Q: On January 5, 2021, Lighter Company acquired a building. The building had an estimated useful life…

A: Depreciation means the amount fixed assets written off due to normal wear and tear , normal usage ,…

Q: On January 1, 2020, DAHLIA Company showed land with a carrying amount of ₱10,000,000 and building…

A: Revaluation surplus means when carrying value of the assets in the books is less than fair value or…

Q: On January 1, 2022, Proton Company purchased a new machine or P2,100,000. The new machine has an…

A: The time period depreciation refers to an accounting technique used to allocate the value of a…

Q: Coachwhip Corporation purchased a machinery on January 1, 2022 for P5,000,000. The same had an…

A: As per straight line method of depreciation Depreciation per annum = (cost - Residual value) /useful…

Q: Coachwhip Corporation purchased a machinery on January 1, 2022 for P5,000,00O. The same had an…

A: Depreciation as per straight line method = (cost - salvage value) /useful life = P5000, 000/8 =…

Q: FDN Company acquires a building on April 1, 2021 at a cost of P52,500,000. The building has an…

A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…

Q: Ayayai Corporation purchased a new plant asset on April 1, 2023, at a cost of $960,000. It was…

A: Depreciation is considered an expense charge on the value of the asset. It can be calculated by…

Q: Coachwhip Corporation purchased a machinery on January 1, 2022 for P5,000,000. The same had an…

A: As per PFRS In case of first time revaluation the revaluation surplus will be directly…

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

On January 1, 2022, Alma Company showed land with carrying amount of P10,000,000 and building with cost of
P60,000,000 and accumulated depreciation of P18,000,000. The land and building were revalued on the same date
and revealed the fair value of land at P15,000,000 and the building at P70,000,000. The original useful life of the
building is 20 years and depreciation is computed on the straight line. The income tax rate is 30%. What is the
revaluation surplus on December 31, 2022?
A. 33,000,000
185 points
Due Apr 26. 12:00
B. 23,100,000
C. 21,450,000
D. 21,700,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions

Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.
Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.
Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for 1,500 each. The company uses group depreciation on a straight-line basis. Required: 1. Prepare journal entries to record the acquisition and the first years depreciation expense. 2. If one of the cars is sold at the beginning of the second year for 7,000, what journal entry is required?
Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was estimated at 2,000. The equipment will be depreciated over 10 years using the double-declining balance method. Counting the year of acquisition as one-half year, Mundo should record 2019 depredation expense of: a. 7,680 b. 9,000 c. 9,600 d. 10,000
The following intangible assets were purchased by Goldstein Corporation: A. A patent with a remaining legal life of twelve years is bought, and Goldstein expects to be able to use it for seven years. B. A copyright with a remaining life of thirty years is purchased, and Goldstein expects to be able to use it for ten years. For each of these situations, determine the useful life over which Goldstein will amortize the intangible assets.
On January 1, 2021, Alma Company showed land with carrying amount of P10,000,000 and building with cost of P60,000,000 and accumulated depreciation of P18,000,000. The land and building were revalued on same date and revealed the fair value of land at P17,000,000 and the building at P70,000,000. The original useful life of the building is 20 years and depreciation is computed on the straight line. What is the revaluation surplus on December 31, 2021?
Coachwhip Corporation purchased a machinery on January 1, 2022 for P5,000,000. The same had an expected useful life of 8 years. Straight line depreciation method is in place for similar items. On January 1, 2024, the asset is appraised as having a sound value of P4,500,000. On January 1, 2027, the asset had a recoverable value of P1,375,000. The amount of revaluation surplus on January 1, 2024 is:
Coachwhip Corporation purchased a machinery on January 1, 2022 for P5,000,000. The same had an expected useful life of 8 years. Straight line depreciation method is in place for similar items. On January 1, 2024, the asset is appraised as having a sound value of P4,500,000. On January 1, 2027, the asset had a recoverable value of P1,375,000. The amount of revaluation surplus on January 1, 2024 is: