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Hello sir.
just wanted to confirm if the below answer is right or notQuestion
At 31st Dec 2014 Berry owned a building that cost $800000 on 1st Jan 2005.It was being deprecated at 2%per annum. On 31st Dec 2014 a revaluation of $1m was recognised. At this date the building had a remaining useful life of 40years.Calculate the depreciation and the revaluation surplus balance for the year ending 31st Dec 2015answer
1000000/40years= 25000 depreciation for the year Dec 2015depreciation before revaluation= 2%×800000=16000 per year
carrying amount=784000(800000-16000)
less valuation = 1000000
revaluation surplus is 216000am I correct?
NO! NO! NO!
Here’s what you have written …
“depreciation before revaluation= 2%×800000=16000 per year”
PER YEAR!
And the building was purchased 10 years ago so carrying value would be $800,000 – $160,000 = $640,000
Then it’s revalued to $1,000,000
Can you take it from there?
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