ACCA · Question 03 · Accounting for Transactions
SECTION A
Titanium Forge Co, a heavy manufacturing firm, revalued its main factory building for the first time on 31 December 20X4. The building had a carrying amount of $4,500,000 and was revalued to $5,200,000. The building originally cost $6,000,000.
What is the correct accounting entry to record this revaluation under IAS 16 Property, Plant and Equipment?
Answer options:
Debit Building $700,000; Credit Profit or Loss $700,000
Debit Building/Accumulated Depreciation $700,000; Credit Revaluation Surplus (OCI) $700,000
Debit Building $1,500,000; Credit Revaluation Surplus (OCI) $1,500,000
Debit Revaluation Surplus (OCI) $700,000; Credit Building $700,000
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