Chapter 6

Exercise 1
Jan. 1 2021 Acquisition
Machinery 160,000
Cash 160,000

Depreciation
Depreciation 40,000
Accum. Dep'n 40,000

Revaluation
Machine A
Accum Dep'n 20,000
Machinery Machine A 16,000
Revaluation Surplus 4,000

Machine B
Accum. Dep'n 20,000
Impairment Loss 2,000
Machinery 22,000

2022
Disposal of Asset
Cash 32,000
Dep'n 38,000/2 *6/12 9,500
Machine B 38,000
Gain on Sale of Machine B 3,500

Acquisition Machinery C

Machinery 80,000
Cash 80,000

Dep'n 31,000
Accum. Dep'n 31,000

Machine A 21,000
84,000/4
C 80,000/4 *6/12 10,000
31,000

Machine A Machine C
FV 61,000 68,500
CA 84-21 63,000
80-10 70,000
Revaluation -2,000 -1,500

Machine A
Accum. Dep'n 21,000
Revaluation Surplus 2,000
Machine A 23,000

Machine C
Accum. Dep'n 10,000
Impairment Loss 1,500
Machine C 11,500
Computations FV CA RV
Machine A 84,000 80,000 4,000
Machine B 38,000 40,000 -2,000

100,000/5 20,000

CA 28,500
FV 32,000
Gain 3,500
MCP
MCP 6-1 Plant Assets 750,000
MCP 6-2
FV 420,000
CA 300,000
Revaluation 120,000
Jan. 1/2021
Realization - Dec. 31
120,000/15 yrs. 8,000
Revaluation Surplus 112,000 C

MCP 6-3
300,000/20 15,000 *6 yrs. 90,000

FV 350,000/ 14yrs. 25,000 D

MCP 6-4
FV 1,600,000
CA
1,250,000/50x 10 Yrs.
1,250,000 250,000 1,000,000
Revaluation 600,000
Realization
600,00/40 15,000
Balance at Dec. 31, 2021 585,000 C

MCP 6-5 1,257,00 add 82,000 = 1,339,000 A

MCP 6-6
1 450,000
15 30,000 * 2.5 75,000

Jan.1- June 30 15,000

July 1- Dec. 31, 2021
480,000
12
*6/12 20,000
35,000 C

FV Building 480,000
CA 450-75
375,000
-15,000 360,000
Revaluation 120,000
Realization
120,000/12 * 6/12 5,000
Balance Revaluation 115,000
Land 15,000
Total Revaluation surplus Dec. 31 130,000 C