[SreeG]

Oh ok, I got it. Thank you 🙂

[SreeG]

Sir, this is another question regarding revaluation surplus, please don’t confuse this with the previous question.

[SreeG]

Ok, thanks. 🙂

[SreeG]

Sir, in the context of the above question, I have seen that in some questions, even when the assets are revalued at the last date of a particular year, then the revaluation is considered to have happened from the beginning of that year. So, in this question, isn’t the accumulated depreciation calculated till year 6 and from then, the new depreciation calculated ?

[SreeG]

Ok, I got it. Thanks, sir 🙂

[SreeG]

Ok thanks. Will be careful in the future about asking the questions in the right forum.

[SreeG]

Oh, alright. I got it. Thank you, sir.

[SreeG]

Actually, the above question is not complete.
It includes the following 4 options, ie;

a) Depreciation expense : $10,635, Land and buildings : $809,365
b) Depreciation expense : $10,635, Land and buildings : $449,365
c) Depreciation expense : $9200, Land and buildings : $810,800
d) Depreciation expense : $9200, Land and buildings : $450,800

The answer that I got is c). Which is obtained by depreciating $460000 worth of buildings at the rate of 2% per annum and calculating the total assets by deducting the depreciation of $9200 from total assets of $820000.

But the right answer is a).

Can you please explain how the right answer is obtained.

[Author]

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