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How much is the revaluation surplus transferred

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Reference no: EM133002455

On Dec. 31, 2020, the following account balances related to Black Corporation's real properties appear on the books:

P3,000,000 for Land 1
P5,000,000 for Land 2
P7,000,000 for Land 3

  • Black Corp. revalued its land to fair value on Jan. 1, 2021 and on this date, the corporation doesn't have any other assets carried at the revalued amount. On this date also, the fair value of Lands 1, 2, and 3 is P3,500,000, P6,000,000, and P9,000,000, respectively. Buildings and other facilities on all three sites are depreciated using a 10-year usable life under the straight-line approach of depreciation. Land 2 and the buildings on the property were sold for a total of P10,000,000 on December 31, 2021.

Problem 1: For the year-ending Dec. 31, 2021, how much is the revaluation surplus transferred to retained earnings?

Reference no: EM133002455

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