Reference no: EM132615343

Light Company bought a machine for ?300,000 on January 1, 20x8. The machine's useful life is 10 years and it is estimated to have a zero residual value and is depreciated using a straight-line method.

The revalued amount of the machine is as follows:

December 31            Fair values of the machines

20x8                               360,000

20x9                              335,000

2x10                           320,000

The enacted tax rate was 30% for each year.

Problem 1: The revaluation surplus in the equity section of Light Company's December 31, 2x10 statement of financial position is:

A. Answer not given

B. 123,443

C. 109,500

D. 77,000

E. 110,000

Problem 2: The amount of revaluation surplus transferred to retained earnings in 20x9 is

A. answer not given

B. P10,000

C. P7,000

D. P6,667

E. P4,333

Problem 3: The amount of depreciation expense to be recognized in 20x9 is

A. 36,000

B. 32,500

C. 42,500

D. 40,000

E. Answer not given