9- Suppose that a company has
9- Suppose that a company has 2 buildings, one for investment(A) and one for administrative (B) purposes. Both properties havean initial cost of 1.000.000 TL. The company does not use the costmodel and both properties have 10 years of useful lives. A isrevalued one year later and the revalued amount is 900.000 TL. B isalso revalued one year later and the revalued amount is 1.200.000TL. After the revaluation the company immediately sells A at950.000 TL and sells B at 800.000 TL. What is the profit/lossamount in the income statement for all of the transactionsabove?
50.000 loss
250.000 loss
100.000 profit
150.000 profit
8- A PPE is acquired for 10.000 TL at the beginning of 2016. Ithad a useful life of 5 years. On January 1, 2018 the asset wasrevalued to 12.000 TL. What would be the comprehensive income inyear 2018?
6.000
4.000
2.000
3.000
4- A company sells a plant asset which originally cost 120.000TL for 40.000 TL on December 31, 2019. The accumulated depreciationaccount had a balance of 48.000 TL after the current year’sdepreciation of 12.000 TL had been recorded. The company shouldrecognize a(n)…
80.000 TL loss on disposal
35.000 TL gain on disposal
32.000 TL loss on disposal
20.000 TL loss on disposal
Answer:
Sol – 9 – The answer of the above problem is given below
Profit on revaluation of building A = Revalued amount – Currentbook value of building
= $900,000 – $900,000
= $0
Profit on Building A on its sale = Sales amount – The revaluedamount of the building
= $950,000 -$900,000
= $50,000
Revaluation amount of Building B = Revalued amount – Currentvalue
= $12,00,000 – $9,00,000
= $3,00,000
Loss on Building B on its sale is = Revalued amount -Consideration -surplus – sales
= $12,00,000 -$8,00,000 – $3,00,000
= $1,00,000
Total profit = Profit of Building A + Profit of building B
=$50,000 + $1,00,000 = $1,50,000
Therefore, the answer to this question is $150,000profit that is option (D)
Sol – 8 – The calculation of this is given as follows
The current value of PPE =$10,000 – Depreciation for 1 year
= $10,000 – ( $10,000 / 5 year )
= $8,000
Comprehensive income of 2018 = Revalued amount – Currentvalue
= $12,000 – $8,000
= $4,000
Therefore the answer to this question is $4,000 that isoption (b)
I have attempted the first 2 questions as there is nothingmentioned how many I have to attempt in case multiple questions aregiven on the same page so I have attempted the 2 questions out of 3.
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