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Dear sir,
I have a doubt with this question from the Dec 2016 question paper
The following trial balance extract relates to Topsy Co as at 30 April 20X6
$’000
Land at cost 800
Building:
Valuation at 1 May 20X2 1,500
Accumulated depreciation at 30 April 20X5 90
Revaluation surplus at 30 April 20X5 705On 1 May 20X2, when the carrying amount of the building was $750,000 it was revalued for the first time to $1.5m and its remaining useful life at that date was estimated to be 50 years. Topsy Co has correctly accounted for this revaluation in the above trial balance. However, Topsy Co has not yet charged depreciation for the year ended 30 April 20X6 or transferred the excess depreciation from the revaluation surplus to retained earnings at 30 April 20X6.
In February 20X6, the land, but not the building, was independently valued at $950,000. This adjustment has yet to be made for the year ended 30 April 20X6.
What is the balance on the revaluation surplus of Topsy Co as at 30 April 20X6 after the required adjustments have been made?
$555,000
$690,000
$840,000
$870,000
How do we calculate this?
Thanks!Put through the adjustments for the year to 30 April, 2006 (depreciation of 30 and transfer of 15)
Revaluation reserve now stands at 690
Now revalue the land by 150 to get the land value up to 950 and that pushes the revaluation reserve up to 840
OK?
Dear sir,
So only the excess depn on revaluation is to be transferred to retained earnings? Not the entire depn balance given?Also, where can I find revised published accounts questions to practice? I see a lot of questions with the old IAS 17 adjustments. Do I simply ignore those adjustments?
Thanks!
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