Accounting for plant asset revaluations. Grand Met, a consumer products company in Great Britain, purchased an office machine for $£ 50,000$ on January 1, Year 3. It estimated that the machine would have a five-year useful life and zero salvage value. Grand Met uses the straight-line depreciation method.

On January 1, Year 6, Grand Met revalues this machine to $£ 25,000$. The firm still expects the machine to last for a total life of five years with zero salvage value.

a. Give the journal entries to record depreciation for Year 3, Year 4, and Year 5.

b. Give the journal entry to record the revaluation on January 1, Year 6, assuming that the firm credits a shareholders' equity account titled Revaluation Allowance.

c. Give the journal entries to record depreciation for Years 6 and 7 assuming that Grand Met charges depreciation on the revaluation against the Revaluation Allowance account. The firm made no further revaluation during the remaining life of the office equipment.

d. What effect did the revaluation have on net income of Year 6 and Year 7?