Oran Question

Oran question Cards that go over revaluation

Old NBV before revaluation?

€840,000 = €1,400,000 − €560,000

New valuation?

€650,000

Accumulated depreciation eliminated?

€560,000; Dr Accumulated Depreciation ↓

Reduction in recorded building cost?

€750,000; Cr Building A ↓

Revaluation deficit?

€190,000

Which account is debited for the deficit?

Dr Revaluation Reserve €190,000 ↓

Complete revaluation journal?

Dr Accumulated Depreciation 560; Dr Revaluation Reserve 190; Cr Building A 750 (€000)

Remaining reserve from €300,000?

€110,000 Cr

Does an increase require Dr or Cr Reserve?

Cr Revaluation Reserve ↑

Old NBV?

€540,000

Revaluation surplus?

€160,000

How to eliminate old depreciation?

Dr Accumulated Depreciation €60,000 ↓

Which account receives €100,000 debit?

Dr Building B ↑

Complete revaluation journal?

Dr Building B 100; Dr Accumulated Depreciation 60; Cr Revaluation Reserve 160 (€000)

Where does Building B's €100,000 debit go?

Cost/Valuation +100

Building B eliminated AD: +60 or −60?

−60

Building A cost adjustment: +750 or −750?

−750

Building A eliminated AD: +560 or −560?

−560

Annual depreciation for Building A at 2%?

€13,000

Annual depreciation for Building B at 2%?

€14,000

Annual depreciation for Building C at 2%?

€8,000

Total building depreciation?

€35,000

Annual depreciation on €200,000 at 20%?

€40,000

Annual depreciation on €150,000 at 10%?

€15,000

AD after four years?

€60,000

NBV at disposal?

€90,000

Trade-in allowance of 20% original cost?

€30,000

Profit or loss on disposal?

€60,000 loss

Cash paid for €200,000 plant with €30,000 trade-in?

€170,000

PPE addition recorded?

€200,000

Annual depreciation at 10%?

€20,000

Cost of retained existing plant?

€1,350,000

Depreciation on retained plant at 10%?

€135,000

Total plant depreciation?

€155,000

Closing plant cost?

€1,550,000

Closing plant accumulated depreciation?

€845,000

Closing plant NBV?

€705,000

Closing vehicle accumulated depreciation?

€90,000