Question

In: Accounting

9- Suppose that a company has 2 buildings, one for investment (A) and one for administrative...

9- Suppose that a company has 2 buildings, one for investment (A) and one for administrative (B) purposes. Both properties have an initial cost of 1.000.000 TL. The company does not use the cost model and both properties have 10 years of useful lives. A is revalued one year later and the revalued amount is 900.000 TL. B is also revalued one year later and the revalued amount is 1.200.000 TL. After the revaluation the company immediately sells A at 950.000 TL and sells B at 800.000 TL. What is the profit/loss amount in the income statement for all of the transactions above?

50.000 loss

250.000 loss

100.000 profit

150.000 profit

8- A PPE is acquired for 10.000 TL at the beginning of 2016. It had a useful life of 5 years. On January 1, 2018 the asset was revalued to 12.000 TL. What would be the comprehensive income in year 2018?

6.000

4.000

2.000

3.000

4- A company sells a plant asset which originally cost 120.000 TL for 40.000 TL on December 31, 2019. The accumulated depreciation account had a balance of 48.000 TL after the current year's depreciation of 12.000 TL had been recorded. The company should recognize a(n)...

80.000 TL loss on disposal

35.000 TL gain on disposal

32.000 TL loss on disposal

20.000 TL loss on disposal

Expert Solution

Sol - 9 - The answer of the above problem is given below

Profit on revaluation of building A = Revalued amount - Current book value of building

= $900,000 - $900,000

= $0

Profit on Building A on its sale = Sales amount - The revalued amount of the building

= $950,000 -$900,000

= $50,000

Revaluation amount of Building B = Revalued amount - Current value

= $12,00,000 - $9,00,000

= $3,00,000

Loss on Building B on its sale is = Revalued amount - Consideration -surplus - sales

= $12,00,000 -$8,00,000 - $3,00,000

= $1,00,000

Total profit = Profit of Building A + Profit of building B

=$50,000 + $1,00,000 = $1,50,000

Therefore, the answer to this question is $150,000 profit that is option (D)

Sol - 8 - The calculation of this is given as follows

The current value of PPE =$10,000 - Depreciation for 1 year

= $10,000 - ( $10,000 / 5 year )

= $8,000

Comprehensive income of 2018 = Revalued amount - Current value

= $12,000 - $8,000

= $4,000

Therefore the answer to this question is $4,000 that is option (b)

I have attempted the first 2 questions as there is nothing mentioned how many I have to attempt in case multiple questions are given on the same page so I have attempted the 2 questions out of 3 .

ekkarill92 answered 2 years ago

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