Robertson Co. purchased the equipment in early 2016 and chose to use the revaluation model for this equipment. At the end of 2016, Robertson recognized revaluation surplus of $10. In the middle of 2017, Robertson sold this equipment. Which of the following statements is correct:

1. The revaluation surplus $10 will be directly transferred to the gain on disposal.

2. The revaluation surplus $10 will be directly transferred to retained earnings.

3. The revaluation surplus $10 will be directly transferred to paid-in capital account.

4. The revaluation surplus $10 will remain unchanged.