Light Company bought a machine for ?300,000 on January 1, 20x8

Subject:AccountingPrice:3.87 Bought7

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Light Company bought a machine for ?300,000 on January 1, 20x8. The machine's useful life is 10 years and it is estimated to have a zero residual value and is depreciated using the straight-line method.

    The revalued amount of the machine is as follows:

        December 31         Fair values of the machine

          20x8                     ? 360,000

          20x9                      335,000

          2x10                      320,000

The enacted tax rate was 30% for each year

1. The revaluation surplus in the equity section of Light Company's December 31, 20x8 statement of financial position is

a. 60,000

b. 90,000

c. 39,000

d. 63,000

 

2. The amount of depreciation expense to be recognized in 20x9 is

a. 32,500

b. 36,000

c. 40,000

d. 42,500

 

3. The amount of revaluation surplus transferred to retained earnings in 20x9 is

a.  6,667

b.  7,000

c.  4,333

d. 10,000

 

4. The revaluation surplus in the equity section of Light Company's December 31, 2x10 statement of financial position is 

a.  77,000

b. 110,000

c. 123,443

d. 109,500