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Part V: Short Analysis (6 points) Jeffrey Beam, Acme Corporations controller, is concerned that net income may be lower this
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Answer #1

A) If there is an upward revision in the value of asset for thefirst time, then the amount of appreciation is

debited to Asset Account and credited to Revaluation Reserve Account. If there is downward revision in the
value of asset then Prot and Loss Account is debited and Asset Account is credited. If an asset was earlier
revalued downward and later on revalued upward then the appreciation to the extent of earlier downfall is
credited to prot and loss account. If an asset was earlier revalued upward and then later on it was revalued
downward then the downfall to the extent of earlier appreciation is debited to Revaluation Reserve Account.
In case the revaluation has a material eect on the amount of depreciation, the same should be disclosed
separately in the year in which revaluation is carried out.

B) The stakeholder in this scenario is Jeffry Beam.

C) Mr. Beam should consider increasing useful life and salvage value of asset.

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