Question 1Joyce Limited purchased land and building on 1st January, 2012 for GH¢200,000 (landGH¢60,000 and buildings GH¢140,000). While there is no depreciation on land, however thecompany uses 5% reducing balance method on building. On 1st January 2016 the land wasrevalued to GH¢75,000 and the buildings to GH¢135,000. Depreciation on buildings is computedat 5% reducing balance. The financial statements are prepared on a yearly basis.Required:Calculate the revaluation reserve for the year ended 31st December, 2016. LBC manufactures mechanical talkative recorder, which trade under the name Talkative'. In theyear ended 31* December 2017, 10,000 Talkatives were manufactured and the related costs were:GHCMaterials3,000Labour4,000Depreciation of Machinery2,000Factory ratesSelling expenses1,0003,000Expenses at head office2,000Abnormal loss3,000In addition to the information above, at 31* December 2017, there were 2,000 Talkatives ininventory.Required:Assuming that these have a resale value of GH¢5 and a Net Realisable Value of GH¢1.15 each,what value should be placed on the closing inventory?

A revaluation reserve seems to be an accounting concept used when a corporation adds a line category…

loyce Limited purchased land and building on 1st January, 2012 for GH¢200,000 (land GH¢60,000 and buildings GH¢140,000). While there is no depreciation on land, however the company uses 5% reducing balance method on building. On Ist January 2016 the land was revalued to GH¢75,000 and the buildings to GH¢135,000. Depreciation on buildings is computed at 5% reducing balance. The financial statements are prepared on a yearly basis. Required: Calculate the revaluation reserve for the year ended 31st December, 2016.

loyce Limited purchased land and building on 1st January, 2012 for GH¢200,000 (land GH¢60,000 and buildings GH¢140,000). While there is no depreciation on land, however the company uses 5% reducing balance method on building. On Ist January 2016 the land was revalued to GH¢75,000 and the buildings to GH¢135,000. Depreciation on buildings is computed at 5% reducing balance. The financial statements are prepared on a yearly basis. Required: Calculate the revaluation reserve for the year ended 31st December, 2016.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles

Section: Chapter Questions

Problem 8.5E: Change in Estimate Assume that Bloomer Company purchased a new machine on January 1, 2016, for...

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