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Why 0.11 need to transfer from OCE to RE?
Transfer from OCE 0·11
Transfer to retained earnings (0·11)The only accounting entry posted for the year to 31 May 2012 was to account for the depreciation based on the revalued amount as at 31 May 2011. Robby’s accounting policy is to make a transfer of the excess depreciation arising on the revaluation of PPE.
I thought Robby had recorded below entries aldy
Dr RE 0.5
Dr OCI 0.11
Cr PPE 0.61This is a technical question and is best referred to the tutor in ask the tutor forums. However, this is my belief which can be wrong. the question stated that the only the depreciation based on the revalued amount was posted. therefore the entry which robby would have done is dr depn exp ( p and l) .61 and cr ppe .61.
therefore we need to transfer the excess depn from oce to re… the last line in the question said robby does this. dr oce (.61 -.50) .11 cr re .11 and lastly we need to record the impairment
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