Information on Mix Co.'s equipment on June 30, 20x8 is shown below:

Equipment (at cost) 500,000

Accumulated depreciation 150,000

350,000

The equipment consists of two machines, Machine A and Machine B. Machine A has a cost of 300,000 and a carrying amount of 180,000. Machine B has a cost of 200,000 and a carrying amount of 170,000. Both machines are measured using the cost model and depreciated on a straight line basis over a ten-year period.

On December 31, 20x8, Mix Co. decided to change from the cost model to the revaluation model. Information on this date follows:

Fair values Remaining useful life

Machine A 180,000 6 years

Machine B 155,000 5 years

On June 30, 20x9, Machine A and Machine B have fair values of 163,000 and 136,500, respectively, and remaining useful lives of 5 years and 4 years, respectively. The tax rate is 30%.

1. How much is the depreciation expense for the fiscal year ended June 30, 20x9?

a. 59,900

b. 55,500

c. 50,000

d. 67,000

2. How much is the revaluation surplus on December 31, 20x8?

a. 10,500

b. (15,000)

c. (10,500)

d. 7,000

3. How much is the carrying amount of the equipment on June 30, 20x9?

a. 163,000

b. 335,000

c. 300,000

d. 299,500