Question
Topic: Revaluation and Change in Accounting Estimate At the beginning of 2015, Cookie Inc. purchased a unit of machinery worth P5,000,000. The machine has an
Topic: Revaluation and Change in Accounting Estimate
At the beginning of 2015, Cookie Inc. purchased a unit of machinery worth P5,000,000. The machine has an estimated useful life of 9 years with a 10% residual value. Tindalo depreciates the machine using the straight-line method. On December 31, 2018, Tindalo was informed that the machine had a gross replacement cost of P7,500,000. Residual value, as per companys policy, is now 10% of the gross replacement cost, and its remaining useful life was revised to 8 years. The entity also revised its depreciation method to double-declining-balance.
1. How much is the revaluation surplus on December 31, 2018?
2. What is the assets depreciation for 2019?
3. How much of the revaluation surplus was transferred to retained earnings during 2019?
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