The following information is relevant for Questions 7.16 and 7.17. Gusna Co purchased a building on 31 December 20x1 for $750,000. At the date of acquisition, the useful life of the building was estimated to be 25 years and depreciation is calculated using the straight-line method. At 31 December 20X6, an independent valuer valued the building at $1,000,000 and the revaluation was recoenised in the financial statements. Gusna's accounting policies state that excess depreciation arising on revaluation of non-current assets can be transferred from the revaluation surplus to retained earnings. 7.16 What is the depreciation charge on the building for the year ended 31 December 20X7? $40,000 $50,000 $30,000 $42,500 A C 7.17 From the list of tokens below, identify the correct debit / credit entries to record the transfer of excess FFA/FA FINANCIAL ACCOUNTING depreciation. TOKEN CREDIT ENTRY DEBIT ENTRY Retained earnings $20,000 Debit entry 000,0ea Revaluation surplus Credit entry $20,000 Revaluation surplus $12,500 Retained earnings $12,500 7.18 Which of the following should be disclosed for tangible non-current assets according to IAS 16 Property. Plant and Equipment? 1 Depreciation methods used and the total depreciation allocated for the period 2 A reconciliation of the carrying amount of non-current assets at the beginning and end period
The following information is relevant for Questions 7.16 and 7.17. Gusna Co purchased a building on 31 December 20x1 for $750,000. At the date of acquisition, the useful life of the building was estimated to be 25 years and depreciation is calculated using the straight-line method. At 31 December 20X6, an independent valuer valued the building at $1,000,000 and the revaluation was recoenised in the financial statements. Gusna's accounting policies state that excess depreciation arising on revaluation of non-current assets can be transferred from the revaluation surplus to retained earnings. 7.16 What is the depreciation charge on the building for the year ended 31 December 20X7? $40,000 $50,000 $30,000 $42,500 A C 7.17 From the list of tokens below, identify the correct debit / credit entries to record the transfer of excess FFA/FA FINANCIAL ACCOUNTING depreciation. TOKEN CREDIT ENTRY DEBIT ENTRY Retained earnings $20,000 Debit entry 000,0ea Revaluation surplus Credit entry $20,000 Revaluation surplus $12,500 Retained earnings $12,500 7.18 Which of the following should be disclosed for tangible non-current assets according to IAS 16 Property. Plant and Equipment? 1 Depreciation methods used and the total depreciation allocated for the period 2 A reconciliation of the carrying amount of non-current assets at the beginning and end period
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 7E: Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for...
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Question 7.17 please explained in detail.
Transcribed Image Text:The following information is relevant for Questions 7.16 and 7.17.
Gusna Co purchased a building on 31 December 20x1 for $750,000. At the date of acquisition, the useful life
of the building was estimated to be 25 years and depreciation is calculated using the straight-line method. At
31 December 20X6, an independent valuer valued the building at $1,000,000 and the revaluation was
recoenised in the financial statements. Gusna's accounting policies state that excess depreciation arising on
revaluation of non-current assets can be transferred from the revaluation surplus to retained earnings.
7.16 What is the depreciation charge on the building for the year ended 31 December 20X7?
$40,000
$50,000
$30,000
$42,500
A
C
Transcribed Image Text:7.17 From the list of tokens below, identify the correct debit / credit entries to record the transfer of excess
FFA/FA FINANCIAL ACCOUNTING
depreciation.
TOKEN
CREDIT ENTRY
DEBIT ENTRY
Retained earnings
$20,000
Debit entry
000,0ea
Revaluation surplus
Credit entry
$20,000
Revaluation surplus
$12,500
Retained earnings
$12,500
7.18 Which of the following should be disclosed for tangible non-current assets according to IAS 16 Property.
Plant and Equipment?
1
Depreciation methods used and the total depreciation allocated for the period
2
A reconciliation of the carrying amount of non-current assets at the beginning and end
period
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