Problem 1 Alena Company applied revaluation accounting to plant asset with carrying amount of

8,000,000 on January 1, year 1, useful life of 4 years and no residual value. Depreciation is based

on straight line method.

On December 31, year 1, independent appraisers determined that the asset has a fair value of

7,500,000.

Required:

1. What is the amount to record depreciation for Year 1?

2. What is the amount included in the journal entry to record the revaluation on December 31,

Year 2?

3. The financial statements for Year 1 shall include balance/carrying amount of plant asset on

January 1, year 2 amounting to _____________.

4. What is included in the journal entry to record depreciation for year 2?