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Dear sir,
1. Concerning example 4, what will be the opening balance for year 2005 for the car account?
2. Is part exchange in the syllabus of F3?
1. The same as the closing balance at the end of 2004 – i.e. zero. The car has been sold and therefore no longer exists.
2. Yes it is.
Dear sir,
There is a question concerning revaluation in the BBP revision kit, where after all the calculation, I have got:
Gain on revaluation $810,000
Less excess on depreciation $$18,000
which gives a balance on revaluation surplus of $792,000-My question is that how will these figures appear in the SOCIE(i.e what figure will appear as revaluation surplus, what figure will appear as retained earnings)
-“Transferring excess depreciation from on revaluation from revaluation surplus to retained earnings”
When doing revaluation, should we ALWAYS transfer the excess depreciation?The 810,000 will be shown in the revaluation surplus column.
The excess depreciation will be shown reducing the revaluation surplus and increasing the retained earnings.
The final balance in the revaluation surplus column will be 792,000.
It is up to the company to choose whether or not they want to transfer the excess depreciation. They can do but they do not have to.
How would I know that I need to transfer this excess depreciation?
It would be told in the question or(in case it is not mentioned in the question) I assume that I must to transfer the excess depreciation?
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