On December 31, 2021, Joy Company reported the following information: Equipment 6,250,000 Accumulated depreciation 2,187,500 The equipment was measured using the cost model and depreciated on a straight-line basis over a 10-year period. On the same date, the management decided to change the basis of measuring the equipment from the cost model to the revaluation model. The equipment had a fair value of P5,687,500 with remaining useful life of 5 years on December 31, 2021. What amount should be reported as revaluation surplus on December 31, 2021? What is the depreciation of the equipment for 2022? What amount should be reported as revaluation surplus on December 31, 2022?
On December 31, 2021, Joy Company reported the following information: Equipment 6,250,000 Accumulated depreciation 2,187,500 The equipment was measured using the cost model and depreciated on a straight-line basis over a 10-year period. On the same date, the management decided to change the basis of measuring the equipment from the cost model to the revaluation model. The equipment had a fair value of P5,687,500 with remaining useful life of 5 years on December 31, 2021. What amount should be reported as revaluation surplus on December 31, 2021? What is the depreciation of the equipment for 2022? What amount should be reported as revaluation surplus on December 31, 2022?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 8MC: On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was...
Related questions
Question
On December 31, 2021, Joy Company reported the following information: Equipment 6,250,000
The equipment was measured using the cost model and depreciated on a straight-line basis over a 10-year period.
On the same date, the management decided to change the basis of measuring the equipment from the cost model to the revaluation model.
The equipment had a fair value of P5,687,500 with remaining useful life of 5 years on December 31, 2021.
- What amount should be reported as revaluation surplus on December 31, 2021?
- What is the depreciation of the equipment for 2022?
- What amount should be reported as revaluation surplus on December 31, 2022?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning