Required:

1. Account for the revaluation and state the treatment for depreciation in the years 2008 and 2009.

2. Account for the revaluation and state the treatment for depreciation from 2010 onwards.

3. What is the amount of realized gain or loss on sale of the asset? Where should this amount be debited/credited?

Question 4 (45 points) Magnifier Pic. bought an asset for $12,000 at the beginning of 2006. It had a useful life of 4 years. On 1 January 2008 the asset was revalued to $16,000. The expected useful life was also revalued to 8 years (starting from 1 January 2008, i.e.it will become obsolete on 1 January 2016). Subsequently, in 2010, the asset was revalued to $8,000 with no change in the estimate of the useful life. On 1 January 2014 the asset was sold to another company for a price of $1000 and Magnifier had incurred $150 in costs to sell the asset. Required: 1. Account for the revaluation and state the treatment for depreciation in the years 2008 and 2009 2. Account for the revaluation and state the treatment for depreciation from 2010 onwards 3. What is the amount of realized gain or loss on sale of the asset? Where should this amount be debited/credited