Respuesta :
Answer:
The correct interpretation of the given problem is outlined in the following portion of the explanation.
Explanation:
On 2019,
Company purchased = $540,000
Life useful = 5 years
(1)...
On year 2019,
[tex]Depriciation=\frac{Cost - Residual \ Value}{useful \ life}[/tex]
On putting the values, we get
⇒ [tex]=\frac{540,000-0}{5}[/tex]
⇒ [tex]=108,000[/tex]
Journal - Dr $108,000 in depreciation A/c.
(2)...
Assets A/c Dr $ 92,880, To reassess surplus $92,880
Now,
[tex]Revalution \ Amount= Carring \ Amount \ of \ Assets \ on \ revaluation \ Date - Valuation \ of \ non \ current \ Assets[/tex]
On putting the values, we get
⇒ [tex]=432,000 - 524,880[/tex]
⇒ [tex]=92,880[/tex] (Gained revaluation)
(3)...
On year 2020,
[tex]Depriciation = \frac{Cost - Residual \ Value}{ useful \ life}[/tex]
On putting values,
⇒ [tex]=\frac{524,880}{4}[/tex]
⇒ [tex]=131,220[/tex]
Journal - Depreciation A/c Dr. $131,220
.
(4)...
Surplus revaluation: Dr $39,312
[tex]Revalution \ Amount = Carring \ Amount \ of \ Assets \ on \ revaluation \ Date - Valuation \ of \ non \ current \ Assets[/tex]
On putting values,
⇒ [tex]=393,660-354,348[/tex]
⇒ [tex]=39,312[/tex] (Loss revaluation)
