The historical cost of land and building of Airbag Ltd that purchased three years ago are $500 000 and $2 000 000 respectively. The building is depreciated using the straight- line method over a 20-year useful life with no residual value and land assume to have an indefinite useful life. Airbag Ltd decides to switch to a revaluation model for Building. The fair value of the building is $1 300 000 and the tax rate is 25 percent (25%). As a result of revaluation, the building's useful life increases to 25 years. REQUIRED Provide the journal entries to record the revaluation.

The historical cost of land and building of Airbag Ltd that purchased three years ago are $500 000 and $2 000 000 respectively. The building is depreciated using the straight- line method over a 20-year useful life with no residual value and land assume to have an indefinite useful life. Airbag Ltd decides to switch to a revaluation model for Building. The fair value of the building is $1 300 000 and the tax rate is 25 percent (25%). As a result of revaluation, the building's useful life increases to 25 years. REQUIRED Provide the journal entries to record the revaluation.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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