CIMA Exam CIMAPRA19-F01-1 Topic 3 Question 60 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam

Question #: 60
Topic #: 3

A building was purchased on 1 January 20X1 for $300,000 and had a useful economic life of 40 years. On 1 January 20X5 the building was revalued by a professional surveyor at $450,000. Directors decided to incorporate the revalued amount into the financial statements.

The accounting entries to record the initial revaluation of the building in the financial statements for the year ended 31 December 20X5 will be to debit building cost $150,000 and then:

Acredit accumulated depreciation $37,500 and credit revaluation reserve $112,500.

Bcredit accumulated depreciation $30,000 and credit revaluation reserve $120,000.

Cdebit accumulated depreciation $30,000 and credit revaluation reserve $180,000.

Ddebit accumulated depreciation $37,500 and credit revaluation reserve $187,500.

Show Suggested Answer

Suggested Answer: C

by Serina at Oct 22, 2022, 05:46 PM

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