Difference on depreciation

Hello Sir,

How are you, with regard to calculation of the old depreciation before the revaluation we should always take the cost over the life of the asset but why in this question they took the historic cost over the remaining life ,is it okay.

Thanks,

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Question

The following trial balance extract relates to Topsy Co as at 30 April 20X6:
$’000 $’000
Land at cost 800
Building:
Valuation at 1 May 20X2 1,500
Accumulated depreciation at 30 April 20X5 90
Revaluation surplus at 30 April 20X5 705
On 1 May 20X2, when the carrying amount of the building was $750,000, it was revalued for the first time to
$1.5m and its remaining useful life at that date was estimated to be 50 years. Topsy Co has correctly
accounted for this revaluation in the above trial balance. However, Topsy Co has not yet charged
depreciation for the year ended 30 April 20X6 or transferred the excess depreciation from the revaluation
surplus to retained earnings at 30 April 20X6.
In February 20X6, the land, but not the building, was independently valued at $950,000. This adjustment has
yet to be made for the year ended 30 April 20X6.
What is the balance on the revaluation surplus of Topsy Co as at 30 April 20X6 after the required
adjustments have been made?
The Answer

$840,000
$ $
At 30 April 20X5 705,000
Increase in value of land in the year ($900,000 – $750,000) 150,000
855,000
Annual transfer to retained earnings
Depreciation based on revalued amount ($1,500,000/50 years) 30,000
Depreciation based on historic cost ($750,000/50 years) (15,000) (15,000)
At 30 April 20X6 840,000