statement of cash flow

Hello Chris,

Could you please assist me for the following question regarding statement of cash flow?

2009:$43,000,000
2008:$48,000,000

During the year the company redesigned its display areas in all of its outlets. The previous displays had cost $10 million and had been written down by $9 million. There was an unexpected cost of $500,000 for the removal and disposal of the old display areas. Also during the year the company revalued the carrying amount of its property upwards by $5 million, the accumulated depreciation on these properties of $2 million was reset to zero. All depreciation is charged to operating expenses.

1. The working for the depreciation expense is as follows:
Depreciation
Balance b/f 48,000
Revaluation (2,000)
Disposal (9,000)
Balance c/f (43,000)
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Difference – charge for year 6,000.

(a) Could you explain why the written down value of 9000 has been put against depreciation. If we have cost of $10M and CV(which is the WDV) of $9M, then deprecation should be $1M.

2. The working for the acquisition of assets is as follows:
Non-current assets
Cost
Balance b/f 80,000
Revaluation (5,000 – 2,000 depreciation) 3,000
Disposal (10,000)
Balance c/f (93,500)
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Cash flow for acquisitions 20,500.

(b) Could you explain the logic of the revaluation($3,000) and the disosal?

Thanks.