On January 1, 2020, Contentie following information related to the land and building: Land Building Accumulated depreciation-building 50,000,000 450,000,000 75,000,000 There were no additions or disposals during the current year. Depreciation is computed using straight line over 15 years for building. On June 30, 2020 the land and building were revalued. Replacement cost Sound value Land Building 65,000,000 480,000,000 1. What is the revaluation surplus on June 30, 2020? 65,000,000 600,000,000 a. 135,000,000 b. 125,000,000 c. 120,000,000 d. 160,000,000 2. What is the depreciation of the building for 2020? a. 30,000,000 b. 35,000,000 c. 40,000,000 d. 32,000,000 3. What is the revaluation surplus on December 31, 2020? a. 125,000,000 b. 130,000,000 c. 123,750,000 d. 115,000,000
On January 1, 2020, Contentie following information related to the land and building: Land Building Accumulated depreciation-building 50,000,000 450,000,000 75,000,000 There were no additions or disposals during the current year. Depreciation is computed using straight line over 15 years for building. On June 30, 2020 the land and building were revalued. Replacement cost Sound value Land Building 65,000,000 480,000,000 1. What is the revaluation surplus on June 30, 2020? 65,000,000 600,000,000 a. 135,000,000 b. 125,000,000 c. 120,000,000 d. 160,000,000 2. What is the depreciation of the building for 2020? a. 30,000,000 b. 35,000,000 c. 40,000,000 d. 32,000,000 3. What is the revaluation surplus on December 31, 2020? a. 125,000,000 b. 130,000,000 c. 123,750,000 d. 115,000,000
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 8MC: On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was...
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1. A. 135,000,000
2. B. 40,000,000
3. B. 130,000,000
Question: How do we solve for item number 3? I'm having a hard time getting 130,000,000. Is the revaluation surplus for land also allocated? Solution for item number 1 is found below and for item number 2:
= 480M sound value / 12 years remaining life
= 40,000,000
Please show solution and explanation, thank you!
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