Question 2As at 1 July 2015, Top Ltd has an asset that has a...

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Accounting

Question 2
As at 1 July 2015, Top Ltd has an asset that has a cost of$100000 and accumulated depreciation of $20000. Top Ltd decided on1 July 2015 that the asset should be revalued to $120000. Theremaining useful life of the asset is eight years, after which timeit will have no residual value. Top Ltd use straight line method toallocate depreciation for the asset.
Required:
Prepare journal entries to reflect the revaluation of the assetand the subsequent depreciation of the revalued asset using thenet-amount method for the year ended 30 June 2016.

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4.1 Ratings (531 Votes)

Gain from upward revaluation of an asset is not a realized gain hence it is recorded in statement of profit and loss It should be shown as revaluation surplus under shareholders equity section of See Answer

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In: AccountingQuestion 2As at 1 July 2015, Top Ltd has an asset that has a cost...Question 2As at 1 July 2015, Top Ltd has an asset that has a cost of$100000 and accumulated depreciation of $20000. Top Ltd decided on1 July 2015 that the asset should be revalued to $120000. Theremaining useful life of the asset is eight years, after which timeit will have no residual value. Top Ltd use straight line method toallocate depreciation for the asset.Required:Prepare journal entries to reflect the revaluation of the assetand the subsequent depreciation of the revalued asset using thenet-amount method for the year ended 30 June 2016.