7. Germs Co. determined the following information for the24,000,000Revaluation model - Cost approachpurpose of revaluing its building:Historical costAccumulated depreciation7,680,0008 yearsActual life32,000,000On5 yearsP4,20 yearsReplacement costEffective lifeRemaining economic lifeDepreciation methodSLM ife30% thIncome tax rateRequirements:a. Compute for the revaluation surplus, net of tax.b. Provide the entry to record the revaluation surplus using ()Proportional method and (2) Elimination method.c. Determine the revisedReannual depreciation after trerevaluation.

Definition: Revaluation Of asset: Revaluation describes the true value of the capital assets which…

Answered: revaluation surplus,

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

7. Germs Co. determined the following information for the
24,000,000
Revaluation model - Cost approach
purpose of revaluing its building:
Historical cost
Accumulated depreciation
7,680,000
8 years
Actual life
32,000,000
On
5 years
P4,
20 years
Replacement cost
Effective life
Remaining economic life
Depreciation method
SLM ife
30% th
Income tax rate
Requirements:
a. Compute for the revaluation surplus, net of tax.
b. Provide the entry to record the revaluation surplus using ()
Proportional method and (2) Elimination method.
c. Determine the revised
Re
annual depreciation after tre
revaluation.

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