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Dear sir,
-Concerning example 4, if instead of selling, Melns bought a new car on 30 September 2004 for $6,500. What should we do then?-Is profit on revaluation and surplus on revaluation the same thing?
If you have watched the lectures and listened carefully, then you really should not be needing to ask this question!
You would depreciate the existing cars as normal for the whole year, and in addition you would depreciate the new car on a straight-line basis – the amount would depend on when in the year you bought the new car and on what its expected scrap value was.
Dear sir,
In the BPP revision kit, the word “asset register” is often use. What does this mean and what is it’s purpose?It is a book that keeps a list of all the non-current assets together with details of their cost and depreciation.
It is not part of the double entry.It helps the business keep track of their non-current assets if they have a lot of them.
Dear sir,
1. What is a surplus on revaluation? Is it the same as profit on revaluation?2. In the free lecture notes, concerning example 5, original useful life is 50 years. How did you obtain this figure?
3. A company bought a property 4 years ago on 1 Jan for $170,000. Since then property prices have risen substantially and the property has been revalued at $210,000. The property was estimated as having a useful life of 20 years when it was purchased. What is the balance on revaluation surplus reported in the SOFP?
The answer is C $74,000.
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