Good day

I have the following question:

Richy Limited has plant that cost R345000 on 01 January 2016. Installation and modification costs R69000 (including vat). Transfer costs paid to lawyer amounted to R20000. Transport costs for bringing the asset to location amounted to R20000. The plant was ready for use on 01 January 2016. The machine s were cleaned on 01 March 2016 at a cost of R10000. Due to the low order levels in April 2016 the plant stood idle.Depreciation is provided over its useful life of 5 years using the straight line method to a nil residual value.Richy Limited measures plant under the revaluation model. The plant was revalued as follows:

31 December 2016 R310 000

31 December 2017 R300 000

31 December 2018 R250 000

Richy Limited transfers the maximum amount from the realised portion of the revaluation surplus to equity. VA T must be calculated at 15%.Required:Disclose the above information in the notes to the financial statements for years ending 2016, 2017 and 2018. (Include in you answer the journal entries that must be recorded in the general journal.)

I am not sure why the following information is given: 'Richy Limited transfers the maximum amount from the realised portion of the revaluation surplus to equity' ; and how to record it in general journal (cause I was of understanding that revaluation surplus is an equity account already)

Kindly advise!

Regards,

Irina