Example of Depreciated Replacement Cost

An asset acquired January 1, 2015, at a cost of $40,000 was expected to have a useful economic life of 10 years. On January 1, 2018, it is appraised as having a gross replacement cost of $50,000.

Required: The journal entry to recognize the revaluation of the asset and depreciation expense at the end of 2018.

An asset was an acquired January 1, 2015, for 10,000 and expected to have a 5 years life. Straight-line depreciation method will be used. At January 1, 2017, the asset is appraised as having a sound value (Book value) of 9,000. On January 1, 2019 the asset is appraised at a sound value of 1,500.

Required: The entries to reflect these events