During the year to $31$ July $20x7$ ILU Co$.,$ Ltd$.$ made a profit of $$37,500$

after accounting for depreciation of $$2,500.$ During the year non$-$current

assets were purchased for $$16,000,$ receivables increased by $$2,000,$

inventories decreased by $$3,600$ and trade payables increased by $$700.$

What was the increase in cash and bank balances during the year?

$$21,300$

$$30,300$

$$24,900$

$$26,300$

An entity has a policy of revaluing its PPE. An asset cost $$15m$ on $1$

January $2008,$ has a useful life of $15$ years and is depreciated on a

straight$-$line basis to a zero residual value. The value of the asset at $31$

December $2008$ was $$14\mathrm{.}5$ m$.$ At $31$ December $2009,$ the market value of

the asset was $$12\mathrm{.}5m.$ The entity does not choose to transfer any

excessive depreciation from revaluation reserve to retained earning. The

accounting entry at $31$ December $2009$ would be:

Depreciation $$1m$ to income statement, fall in value of $$0\mathrm{.}96m$ to the income statement

Depreciation $$1\mathrm{.}04m$ to income statement, fall in value of $$0\mathrm{.}5m$ charged to revaluation

reserve and $$0\mathrm{.}46m$ to the income statement

Depreciation $$1m$ to income statement, fall in value of $$0\mathrm{.}5m$ charged to revaluation

reserve and $$0\mathrm{.}5m$ to the income statement

Depreciation $$1\mathrm{.}04m$ to income statement, fall in value of $$0\mathrm{.}96m$ charged to

revaluation reserve