Howard Corp. purchased a building on Jan. 1, 2011 for P1,250,000. At acquisition, the useful life of the building was 50 years. Depreciation is calculated on the straight-line basis. On Jan. 1, 2021, the building was revalued to P1,600,000. Howard Corp. has a policy of transferring the excess depreciation on revaluation from the revaluation surplus to retained earnings.

Assuming no further revaluations take place, what is the balance on the revaluation surplus at Dec. 31, 2021?

a. P341,250

b. P350,000

c. P585,000

d. P600,000

Complete Solution and please explain