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05 Task Performance 1

This document contains two accounting problems involving the revaluation of assets. [1] The first problem involves a building acquired by Jolly Co. in 2009 that was reappraised in 2014, showing an increased replacement cost. [2] The second problem involves plant assets held by Macro Co. that were reappraised in 2014, showing a decreased fair value. [3] For both problems, the document tests the examinee's ability to select the correct accounting entries and figures reflecting depreciation and revaluation of the assets.

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Alexandra James
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65 views

05 Task Performance 1

This document contains two accounting problems involving the revaluation of assets. [1] The first problem involves a building acquired by Jolly Co. in 2009 that was reappraised in 2014, showing an increased replacement cost. [2] The second problem involves plant assets held by Macro Co. that were reappraised in 2014, showing a decreased fair value. [3] For both problems, the document tests the examinee's ability to select the correct accounting entries and figures reflecting depreciation and revaluation of the assets.

Uploaded by

Alexandra James
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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BM1706

Name: DATE: SCORE:

Analyze and answer the given problems. Encircle the letter of the correct answer. Use 10-column
worksheet for the solutions. (7 items x 5 points)

PROBLEM I
On January 1, 2X09, Jolly Co. acquired a building at a cost of P5,000,000. The building has been
depreciated on the basis of a 20-year life. On January 1, 2X14, an appraisal of the building showed a
replacement cost of P8,000,000 with no change in useful life.

1. Ignoring income tax, what amount should be credited to revaluation surplus on January 1, 2X14?
a. P3,000,000 c. P4,250,000
b. P2,250,000 d. P6,000,000

2. What is the depreciation for


2X14? a. P250,000 c. P400,000
b. P150,000 d. P300,000

3. What is the revaluation surplus that should be reported in December 31, 20X4 statement of financial
position?
a. P2,100,000 c. P1,850,000
b. P2,250,000 d. P2,800,000

PROBLEM II
Macro Company applied revaluation accounting to plant assets with carrying amount of P4,000,000 on
January 1, 2X14, useful life of four (4) years, and no residual value. Depreciation is calculated on the straight
line basis. On December 31, 2X14, independent appraisers determined that the asset has a fair value of
P3,750,000.

1. Which of the following is a correct debit/credit entry in recording the depreciation for 2X14?
a. Dr. accumulated c. Cr. accumulated depreciation
depreciation P1,000,000 P250,000
b. Dr. depreciation P250,000 d. Dr. depreciation P1,000,000

2. Which of the following is a correct debit/credit entry in recording revaluation on December 31, 2X14?
a. Dr. accumulated c. Cr. plant asset P750,000
depreciation P250,000 d. Cr. revaluation surplus P750,000
b. Cr. depreciation P750,000

3. Which of the following information is included in the 2014 financial statements?


a. Accumulated depreciation c. Plant asset P3,750,000
P1,000,000 d. Revaluation surplus P250,000
b. Depreciation P250,000

4. Which of the following is a correct debit/credit entry in recording depreciation for 2X15?
a. Dr. accumulated depreciation P1,000,000
b. Dr. depreciation P1,250,000
c. Cr. accumulated depreciation P750,000
d. Dr. depreciation P1,000,000
Rubric for grading
PERFORMANCE INDICATORS POINTS
Correct letter is encircled 2
Correct solutions/entries are provided 3
TOTAL 5

05 Task Performance 1 *Property of STI


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