9-10

A company bought a property in Chelsea four years ago on 1 January for $170,000. Since then property prices have risen substantially and the property has been revalued at $210,000. The property was estimated as having a useful life of 20 years when it was purchased. What is the amount transferred to the revaluation reserve? : a. $74,000 b. $136,000 c. $210,000 d. $34,000 Your firm bought a machine for $5,000 on 1 January 20X1, which had an expected useful life of four years and an expected residual value of $1,000; the asset was to be depreciated on the straight-line basis. The firm's policy is to charge depreciation in the year of disposal. On 31 December 203, the machine was sold for $1,600. What amount should be entered in the 203 statement of comprehensive income for profit or loss on disposal? : a. Profit of $600 b. Profit of $350 c. Loss of $600 d. Loss of $400