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HAI JOHN SIR
Elliot CO bought land and buildings for$300000 and on 1 january 20X3 which included 500000 for the land . The asset had a useful life of 50 years.On 1 january 20X7 ,Elliot CO revalued their asset to their current value. the valuation was$ 800000 in total, including $110000 for the land.there was no change in the remaining useful life of the asset after revaluation .what should the balance on the revaluation surplus be immediately after the revaluation.?
i have confusion on which amount should be taken .Ifwe need to calculate the included amont or not?
Can you please solve the question and please state the reason also
REGARDS
AHLAM AMINA
The revaluation surplus is the difference between the new valuation of $800,000 and the net book value of the land and buildings. The net book value is the original cost of $300,000 less the accumulated depreciation over the 4 years (remembering that only the buildings will have been depreciated, not the land).
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