Accounting [ IAS-16]

[blackrose420]

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
<b>Required</b> 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

[wsafca]

Had there been no change in the estimate of useful life of an asset. The remaining life is three years

Depreciation for the will be calculated to Rs 23,333

Depreciation expense(Dr)23,333
Accumulated Depreciation (Cr.) 23,333

Then incremental depreciation would be separated i.e the depreciation charge on revaluation

It is Rs. 7,708.

Surplus on revaluation (Dr) 7,708
Equity (Cr) 7,708


Assuming the year end December 31
Regards

Ahmed