Problem 31-7 (IAA) On January 1, 2018, Epitome Company acquired the following property, plant and equipment: Land Building Machinery Equipment Cost 5,000,000 25,000,000 10,000,000 3,000,000 Useful life Land Building Machinery Equipment 25 5 10 At the beginning of 2021, a revaluation of property, plant and equipment was made by professionally qualified valuers. While no change in the useful life of the assets was indicated, it was ascertained that replacement cost of the assets had increased by the following percentage: 100% 80% 50% 40% It was authorized that such revaluation be recorded in the accounts and that depreciation be recorded on the basis of revalued amount. Required: a. Prepare journal entry to record the revaluation on January 1, 2021. b. Prepare journal entry to record the depreciation for the current year. c. Prepare journal entry to record the piecemeal realization, of the révaluation surplus. d. Present the assets in the statement of financial position on December 31, 2021.

Problem 31-7 (IAA) On January 1, 2018, Epitome Company acquired the following property, plant and equipment: Land Building Machinery Equipment Cost 5,000,000 25,000,000 10,000,000 3,000,000 Useful life Land Building Machinery Equipment 25 5 10 At the beginning of 2021, a revaluation of property, plant and equipment was made by professionally qualified valuers. While no change in the useful life of the assets was indicated, it was ascertained that replacement cost of the assets had increased by the following percentage: 100% 80% 50% 40% It was authorized that such revaluation be recorded in the accounts and that depreciation be recorded on the basis of revalued amount. Required: a. Prepare journal entry to record the revaluation on January 1, 2021. b. Prepare journal entry to record the depreciation for the current year. c. Prepare journal entry to record the piecemeal realization, of the révaluation surplus. d. Present the assets in the statement of financial position 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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