11-12-2009, 04:47 PM
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.
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.
