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Question 4: Following balances have been extracted from the ledger of Titan Plc at 31 December 2020 Dr Cг. Land and Building (Note 1) Valuation (1/1/2020) Accumulated depreciation (1/1/2020) Plant and equipment (Note 1) Valuation (1/1/2020) Accumulated depreciation at (1/1/2020): Revaluation surplus (31/12/2020) (Note 1) Retained earnings (31/12/2020) 500,000 80,000 175,000 70,000 209,000 256,450 Note 1 Titan Plc measures its PPE under the revaluation model. On 1 January 2020, the company's land and buildings were valued at £450,000 (Land value £100,000) and its plant and equipment were at £85,000. The valuation has not been reflected in the balances above. On 1 January 2020, the remaining useful lives of the buildings and plant and equipment were reassessed at 20 years and four years respectively. There were no unrecorded acquisitions to or disposals of PPE in the year ended 31 December 2020. The revaluation surplus at 311 December 2020, included £200,000 in respect of land and buildings with the remainder attributable to plant and equipment. Titan plc has a policy of making an annual transfer between the revaluation surplus and retained earnings wherever possible. Depreciation charges for the year ended 31 December 2020 on historical basis would have been £15,000 for plant and equipment and £10,000 for buildings. Required How the above will be reflected in the financial position of the company as at 31 December 2020?

Question 4: Following balances have been extracted from the ledger of Titan Plc at 31 December 2020 Dr Cг. Land and Building (Note 1) Valuation (1/1/2020) Accumulated depreciation (1/1/2020) Plant and equipment (Note 1) Valuation (1/1/2020) Accumulated depreciation at (1/1/2020): Revaluation surplus (31/12/2020) (Note 1) Retained earnings (31/12/2020) 500,000 80,000 175,000 70,000 209,000 256,450 Note 1 Titan Plc measures its PPE under the revaluation model. On 1 January 2020, the company's land and buildings were valued at £450,000 (Land value £100,000) and its plant and equipment were at £85,000. The valuation has not been reflected in the balances above. On 1 January 2020, the remaining useful lives of the buildings and plant and equipment were reassessed at 20 years and four years respectively. There were no unrecorded acquisitions to or disposals of PPE in the year ended 31 December 2020. The revaluation surplus at 311 December 2020, included £200,000 in respect of land and buildings with the remainder attributable to plant and equipment. Titan plc has a policy of making an annual transfer between the revaluation surplus and retained earnings wherever possible. Depreciation charges for the year ended 31 December 2020 on historical basis would have been £15,000 for plant and equipment and £10,000 for buildings. Required How the above will be reflected in the financial position of the company as at 31 December 2020?

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
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Question 4: Following balances have been extracted from the ledger of Titan Plc at 31 December 2020 Dr Cr. 3. Land and Building (Note 1) Valuation (1/1/2020) Accumulated depreciation (1/1/2020) Plant and equipment (Note 1) Valuation (1/1/2020) Accumulated depreciation at (1/1/2020): Revaluation surplus (31/12/2020) (Note 1) Retained earnings (31/12/2020) 500,000 80,000 175,000 70,000 209,000 256,450 Note 1 Titan Plc measures its PPE under the revaluation model. On 1 January 2020, the company's land and buildings were valued at £450,000 (Land value £100,000) and its plant and equipment were at £85,000. The valuation has not been reflected in the balances above. On 1 January 2020, the remaining useful lives of the buildings and plant and equipment were reassessed at 20 years and four years respectively. There were no unrecorded acquisitions to or disposals of PPE in the year ended 31 December 2020. The revaluation surplus at 31 December 2020, included £200,000 in respect of land and buildings with the remainder attributable to plant and equipment. Titan plc has a policy of making an annual transfer between the revaluation surplus and retained earnings wherever possible. Depreciation charges for the year ended 31 December 2020 on historical basis would have been £15,000 for plant and equipment and £10,000 for buildings. Required How the above will be reflected in the financial position of the company as at 31 December 2020?
Transcribed Image Text:Question 4: Following balances have been extracted from the ledger of Titan Plc at 31 December 2020 Dr Cr. 3. Land and Building (Note 1) Valuation (1/1/2020) Accumulated depreciation (1/1/2020) Plant and equipment (Note 1) Valuation (1/1/2020) Accumulated depreciation at (1/1/2020): Revaluation surplus (31/12/2020) (Note 1) Retained earnings (31/12/2020) 500,000 80,000 175,000 70,000 209,000 256,450 Note 1 Titan Plc measures its PPE under the revaluation model. On 1 January 2020, the company's land and buildings were valued at £450,000 (Land value £100,000) and its plant and equipment were at £85,000. The valuation has not been reflected in the balances above. On 1 January 2020, the remaining useful lives of the buildings and plant and equipment were reassessed at 20 years and four years respectively. There were no unrecorded acquisitions to or disposals of PPE in the year ended 31 December 2020. The revaluation surplus at 31 December 2020, included £200,000 in respect of land and buildings with the remainder attributable to plant and equipment. Titan plc has a policy of making an annual transfer between the revaluation surplus and retained earnings wherever possible. Depreciation charges for the year ended 31 December 2020 on historical basis would have been £15,000 for plant and equipment and £10,000 for buildings. Required How the above will be reflected in the financial position of the company as at 31 December 2020?
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