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I am currently looking at Question 32 ADJUSTMENTS and SOFP.
I just cant understand why Land is getting deprecated as I thought you cant depreciate land??
Question is (Land 5 million and Buildings at Cost 30 Million) Trial Balance
Building Depreciation 20000 Trial Balance
Their is revaluation of 8 million for land and 39 Million for Buildings
Their solution is 35000(Land + Buildings) – Depreciation 20000 = carry amount 15000
Why is land included when it never depreciates??I would of thought 30000 – 20000 = 10000
Hi,
They are not depreciating the land. They are just depreciating the depreciation from the land and building category. The depreciation will be based on the building only.
Thanks
Another question sir.
When recording downward revaluation to cancel previous upward revaluation, l know that we debit Retained earnings first but do we also have to debit the Income statement?
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