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Dower Corporation prepares its financial statements according to IFRS. On March 31, 2021, the company purchased equipment for $240,000. The equipment is expected to have a six-year useful life with no residual value. Dower uses the straight-line depreciation method for all equipment. On December 31, 2021, the end of the company’s fiscal year, Dower chooses to revalue the equipment to its fair value of $220,000.

Required:
1.Calculate depreciation for 2021.
2-a. Calculate the revaluation of the equipment.
2-b. Prepare the journal entry to record the revaluation of the equipment.
3.Calculate depreciation for 2022.

• Req 1
• Req 2A
• Req 2B
• Req 3

Prepare the journal entry to record the revaluation of the equipment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)

No	Event	General Journal	Debit	Credit
1	1	Equipment
		Accumulated depreciation

• Req 3

• Calculate depreciation for 2022. (Round your denominator answer to 2 decimal places.)

  	Straight-Line Depreciation Choose Numerator: / Choose Denominator: = Annual Depreciation Expense Formula Cost minus residual / Estimated Useful Life (years) = Depreciation Expense Amounts / = 0

• Req 4A
• Req 4B

• Calculate the revaluation of the equipment assuming that the fair value of the equipment at the end of 2021 is $195,000. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)

  	Before Revaluation Conversion Factor After Revaluation Equipment 195000/210000 Accumulated depreciation 195000/210000 Book value 195000/210000

• Req 4B

• Assume that the fair value of the equipment at the end of 2021 is $195,000. Prepare the journal entry to record the revaluation of the equipment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole number.)

  Journal entry worksheet

• Record the revaluation of the equipment.

• Note: Enter debits before credits.

  	Event General Journal Debit Credit 1

Answer 1

** Please note - All figures are in "$"

		(All Figures in $)
1	Calculation for Depreciation for the year 2021
	Cost of Equipment	240000
	Expected Life( In years)	6
	Annual Depreciation(Straight line method)	40000
	Equipment was purchased on 31st March 2021
	So Depreciation for the year 2021 will be accounted for 9 Months
	40000*9/12	30000
2 a	Revaluation of the Equipment
	Before Revaluation	Adjustment	After revaluation
Equipment	240000	-20000	220000
Accumulated Depreciation	-30000	30000	Nil
Book Value	210000	10000	220000
2 b	Journal Entry to record the revaluation of Equipment
			(in $)
Date	Particulars	Debit	Credit
31-12-2021	Equipment A/c	10000
	Revaluation Reserve A/c		10000
	(Being Equipment revalued )
3	Calculation for Depreciation for the year 2022
	Value of Equipment	220000
	Remaining Life of Equipment (In Years)	5.25
	Depreciation (using Straight Line Method)
	220000/5.25	41906