Question
3. Suppose that a company has 2 buildings, one for investment (A) and one for administrative (B) purposes. Both properties have an initial cost of
3. Suppose that a company has 2 buildings, one for investment (A) and one for administrative (B) purposes. Both properties have an initial cost of 1.000.000 TL. The company does not use the cost model and both properties have 10 years of useful lives. Straight-line method is used and the company nets the accumulated depreciation before revaluations. First, A is revalued one year later and the revalued amount is 900.000 TL. B is also revalued one year later and the revalued amount is 1.350.000 TL. Then, a further revaluation is made in the following year too. The new revalued amounts are 950.000 TL for A and 600.000 TL for B in the second year. What is the total change in the shareholders equity during these two years after all of the transactions above?
a) Increased by 350.000 TL
b) Decreased by 200.000 TL
c) Increased by 150.000 TL
d) Decreased by 450.000 TL
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