Revaluation surplus journal entry? - Printable Version +- Accountancy Forum (https://www.accountancy.com.pk/forum) +-- Forum: The Profession (https://www.accountancy.com.pk/forum/forumdisplay.php?fid=4) +--- Forum: Accounting and Audit (https://www.accountancy.com.pk/forum/forumdisplay.php?fid=7) +--- Thread: Revaluation surplus journal entry? (/showthread.php?tid=6795) |
Revaluation surplus journal entry? - kashif187 - 10-28-2009 Corvette the leading car manufacturing company acquired a machine for Rs.125,000 on Jan 1, 2004 estimated life was 8 years. Depreciation is charged on straight line method. On Jan 1, 2009 the machine was revalued at Rs.70,000.Apart from recording revaluation entry, no other entries have been passed Required Calculate the value of depreciation expense and pass journal entry in accordance with IAS-16 Calculate the value of revaluation surplus and pass journal entry in accordance with IAS-16 - hmmm - 10-29-2009 125000/8=15625 depreciation per year depreciation for 3 years = 15625*3=46875 WDV after 3 years = 125000-46875 = 78125 revalued value = 70000 difference = 78125 - 70000 = 8125 8125 should be charged to p&l a/c if it is first time revalued no revaluation surpluse account already exist. firstly charged the accumulated depreciation to asset dr acumulated dep cr asset now dr p&l a/c cr asset closing balance of the asset should be 70000 - skystar - 10-30-2009 <blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by kashif187</i> <br />Corvette the leading car manufacturing company acquired a machine for Rs.125,000 on Jan 1, 2004 estimated life was 8 years. Depreciation is charged on straight line method. On Jan 1, 2009 the machine was revalued at Rs.70,000.Apart from recording revaluation entry, no other entries have been passed Required Calculate the value of depreciation expense and pass journal entry in accordance with IAS-16 Calculate the value of revaluation surplus and pass journal entry in accordance with IAS-16 <hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote"> - skystar - 10-30-2009 <blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by kashif187</i> <br />Corvette the leading car manufacturing company acquired a machine for Rs.125,000 on Jan 1, 2004 estimated life was 8 years. Depreciation is charged on straight line method. On Jan 1, 2009 the machine was revalued at Rs.70,000.Apart from recording revaluation entry, no other entries have been passed Required Calculate the value of depreciation expense and pass journal entry in accordance with IAS-16 Calculate the value of revaluation surplus and pass journal entry in accordance with IAS-16 <hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote"> - farazkpmg - 10-30-2009 Boss its of 6 year not for 3 year working... - hmmm - 11-01-2009 ok big boss. u can also solve - Arabian - 11-03-2009 <font color="purple">125000/8=15625 depreciation per year depreciation for 5 years = 15625*5=78125 WDV after 3 years = 125000-78125 = 46875 revalued value = 70000 difference = 70000-46875 = 23125 Asset 23125 Dr. Revaluation surplus 23125 Cr. </font id="purple"> - hmmm - 11-04-2009 revaluation surpluls at the end will be transferred to retained earing what will be the effect of deferred tax? tax base of revaluation surplus is zero. deferred tax asset created for the diffirence. I have read the book of Kamran but that is confusing. can anyone explian it in detail? mean what entry will be pass for deferred tax - irfan kazim - 11-12-2009 You are all boss. Working. 125000/8=15625 previous 5 year depreciation= 15625*5=78125 WBV 125000-78125= 46875 Revaluation surplus 70000-46875=23125 Journal entry at the first date of Jan 2009 Accumulated depreciation a/c 78125 Assets a/c 78125 At the year end Depreciation a/c 23333 accumulated depreciation 23333 workings 70000/3=23333 Revaluation surplus Assets a/c 23125 Revaluation surplus 23125 Excess depreciation due to revaluation adjusted revaluation a/c 7708 retained earnings 7708 workings 23125/3=7708 or 23333-15625= 7708 Excess amount of depreciation is transfered to retained earning account instead whole revaluation surplus amount will be transfered to retained earning account. |