You purchased a new production machine for $5 million on January 1, 2013. Its useful life was

estimated to be 10 years, and the salvage value was estimated at $100,000. Your firm uses straight - line depreciation.

On January 1, 2014, the machine has a fair value of $6 million. Using the revaluation model and the cost model, what would be the effect on your financial statements?

On January 1, 2015, the machine has a fair value of $4 million. Using the revaluation model and

the cost model, what would be the effect on your financial statements?

Please explain! Thank you.