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 recognised 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 What is the journal entry to record the transfer of excess depreciation from the revaluation surplus to retained earnings?
A、Dr Revaluation surplus $20,000Cr Retained earnings $20,000
B、Dr Revaluation surplus $12,500Cr Retained earnings $12,500
C、Dr Retained earnings $20,000Cr Revaluation surplus $20,000
D、Dr Revaluation surplus $12,500Cr Retained earnings $12,500
A、Dr Revaluation surplus $20,000Cr Retained earnings $20,000
B、Dr Revaluation surplus $12,500Cr Retained earnings $12,500
C、Dr Retained earnings $20,000Cr Revaluation surplus $20,000
D、Dr Revaluation surplus $12,500Cr Retained earnings $12,500
【参考答案及解析】
The excess deprecation is the new depreciation amount of $50,000 less the old depreciationcharge of $30,000 ($750,000/25 years) which is $20,000. This amount should be debitedfrom the revaluation surplus and credited to retained earnings each year. Remember that both retained earnings and the revaluations surplus are credit balances in the trial balance
The excess deprecation is the new depreciation amount of $50,000 less the old depreciationcharge of $30,000 ($750,000/25 years) which is $20,000. This amount should be debitedfrom the revaluation surplus and credited to retained earnings each year. Remember that both retained earnings and the revaluations surplus are credit balances in the trial balance