Question
TOKI PJSC owns two pieces of land in Dubai. Land A was purchased in 2013 at a cost of Dh10 million while Land B was
TOKI PJSC owns two pieces of land in Dubai. Land A was purchased in 2013 at a cost of Dh10 million while Land B was purchased in 2014 at a cost of Dh12 million. The lands were classified as fixed assets, and were revalued as follows:
| Open market value | |
| Land A | Land B |
Years revalued | Dh million | Dh million |
2015 | 8 | 16 |
2017 | 12 | 11 |
2019 | 11 | 14 |
Required:
At each valuation date, calculate the surplus or deficit arising on the revaluation of both lands, respectively
Question 2
The inventory information of Amatali Company is given as follows:
Historical cost | Dh12,000 |
Replacement cost | Dh7,000 |
Expected selling price | Dh9,000 |
Expected selling cost | Dh500 |
Normal profit margin | 50% of price |
After the above-stated adjustment, the expected selling price becomes Dh13,000 while the other information remains the same. According to International Accounting Standard (IAS) 2, after this change in the expected selling price, what adjustment should be done to the inventory?
Select one:
a. Inventory should be increased (debited) by Dh1,000.
b. Inventory should be increased (debited) by Dh4,000.
c. No adjustment should be made to inventory once it is written down.
d. Inventory should be increased (debited) by Dh3,500.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started