revaluation surplus,

Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter7: Fixed Assets, Natural Resources, And Intangible Assets
Section: Chapter Questions
Problem 7.3.3MBA
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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.
Transcribed Image Text: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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