Question

Required information (The following information applies to the questions displayed below. Dower Corporation prepares its financial statements according to IFRS. On March 31, 2021, the company purchased equipment for $220,000. The equipment is expected to have a five-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 $223,000. 4a. Calculate the revaluation of the equipment assuming that the fair value of the equipment at the end of 2021 is $162,000. 4b. Assume that the fair value of the equipment at the end of 2021 is $162,000. Prepare the journal entry to record the revaluation of the equipment. X Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 4A Reg 4B Assume that the fair value of the equipment at the end of 2021 is $162,000. 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 intermediate calculations. Round your final answers to nearest whole dollar amount.) No Event Debit Credit General Journal Revaluation expense Accumulated depreciation Equipment 4,412

Answer 1

Dower Corporation Requirement 4a. Requirement 4b. Equipment Accumulated depreciation Book Value Before After Revaluation Revaluation 220000 190588 -33000 -28588 187000 162000 Journal Enteries Trans. Particulars Revaluation expense a/c Dr. Accumulated depreciation a/c Dr. To Equipment Debit in $ Credit in $ 25000 4412 29412 Depreciation for 2021: $220,000/5 = $44,000 x 9/12 = $33,000 220000 x 162000 / 187000 = 190588 33000 x 162000 / 187000 = 28588 If a revaluation surplus account relating to the same asset had existed, that account would have been debited up to the amount of its balance before debiting revaluation expense