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I am trying to solve this for the first time but i don’t understand how or how to calculate the date?
an entity revalued its land and buildings at the start of the year to $60 million ($15 million for the land). the property cost $30 million ($6 million for the land) ten years prior to revolution. the total expected useful life of 40 years remained unchanged. the entity’s policy is to make an annual transfer of realized amounts to retained earnings.
show the effects of the above on the financial statements for the year.pleas show the steps….
Hi,
I’m happy to show you the steps once you have shown me what you have done in your answer. the reserve transfer is tough but the rest of the question is a standard revaluation.
To get you started then you need to work out what the carrying value of the Land and Buildings is immediately prior to the revaluation. So, remember that land is not depreciated and the buildings cost will be spread over 40 years, with us having used it for 10 of those year.
See if you can work out the revaluation gain and then we can look at the rest afterwards.
Thanks
An entity revalued its land and buildings at the start of the year to
$60 million ($15 million for the land). The property cost $30 million ($6
million for the land) ten years prior to the revaluation. The total
expected useful life of 40 years remained unchanged. The entity’s
policy is to make an annual transfer of realised amounts to retained
earnings.
Show the effects of the above on the financial statements for the
year.
please show me how to calculate thisHi,
I’ll say the same as what I said to the student back in June 2022. I’m happy to help once I can see that you have at least attempted the question first.
Thanks
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