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The cost of the asset is 600,000 after revaluation and the revaluation surplus is 340000 and at the date of sale the accumulated depreciation is 500,000 and the cash proceeds is 80000.
What amount should we transfer from revaluation surplus to retained earningsWhen the asset is sold, the whole of the balance remaining on the revaluation reserve is transferred to retained earnings because it is no longer non-distributable.
At the date of revaluation the balance on the revaluation surplus is 340,000
So when the asset is sold out the entry would be:
Dr. Revaluation surplus 320,000
Cr. Retained earnings. 320,000
Please correct me if I am wrong
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