Reference no: EM132655754
Questions -
Q1. Seaside Company applied revaluation accounting to plant asset with carrying amount of P4,000,000 on January 1, 2016, useful life of 4 years, and no residual value, Depreciation is calculated on the straight line basis.
On December 31, 2016, independent appraisers determined that the asset has a fair value of P3,750,000.
1. What is the journal entry to record depreciation for 2016?
a. Debit accumulated depreciation P1,000,000
b. Debit depreciation P250,000
c. Credit accumulated depreciation P250,000
d. Debit depreciation P1,000,000.
2. What is the journal entry to record the revaluation on December 31, 2016?
a. Debit accumulated depreciation P250,000
b. Credit depreciation P750,000
c. Credit plant asset P750,000
d. Credit revaluation surplus P750,000
3. The financial statements for 2016 shall include which of the following information?
a. Accumulated depreciation P1,000,000
b. Depreciation P250,000
c. Plant asset P3,750,000
d. Revaluation surplus P250,000
4. What is the journal entry to record depreciation for 2017?
a. Debit accumulated depreciation P1,000,000
b. Debit depreciation P1,250,000
c. Credit accumulated depreciation P750,000
d. Debit depreciation P1,000,000
Q2. Cycle company provided the following account balances relating to property, plant and equipment on January 1, 2016.
Land 2,000,000
Building 15,000,000
Accumulated depreciation 3,750,000
Machinery 3,000,000
Accumulated depreciation 1,500,000
Assets have been carried at cost since their acquisition. All assets were acquired on January 1, 2006. The straight line method is used.
On January 1, 2016, the entity revalued the property, plant and equipment. On such date, competent, appraisers submitted the following: Replacement cost
Land 5,000,000
Building 25,000,000
Machinery 5,000,000
1. Before income tax, what is the revaluation surplus on January 1, 2016?
a. 15,000,000
c. 30,000,000
b. 11,500,000
d. 8,500,000
2. What is the depreciation for 2016?
a. 531,250
c. 525,000
b. 875,000
d. 625,000
3. What is the revaluation surplus on December 31, 2016?
a. 11,075,000
c. 11,050000
b. 11,150,000
d. 10,850,000