In: Accounting
Axe Ltd. purchased a building worth Tshs. 200,000 on January 1,
2008. The building has a useful life of 20 years and the company
uses straight line method. On December 31, 2010 the company intends
to switch to revaluation model and carries out a revaluation
exercise which estimates the fair value of the building to be
Tshs.190,000 as at December 31, 2010. On December 31, 2012 Axe Ltd.
revalues the building again to find out that the fair value should
be Tshs.140,000. The expected useful life has remained
unchanged
Required: Calculate
a)Revaluation surplus amounts and show the Journal to record the
revaluations
b)Depreciation charge for each period
c)Excess depreciation to be transferredand show the Journal to
record the transfer
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