Wilson Inc wishes to use the revaluation model for this property: $$\begin{array} { | l | r | }
\hline & \text { Before Revaluation } \
\hline \text { Building Gross Value } & 120,000 \
\hline \text { Building Accumulated Depreciation } & 40,000 \
\hline \text { Net carrying value } & 80,000 \
\hline
\end{array}$$ The fair value for the property is $40,000. Using straight-line depreciation and assuming that the property has a remaining depreciable life of 5 years, how much would be booked to accumulated depreciation in the year subsequent to the revaluation?
A)$8,000 credit.
B)$8,000 debit.
C)$16,000 credit.
D)$16,000 debit.

Question

Wilson Inc wishes to use the revaluation model for this property: $$\begin{array} { | l | r | } 
\hline & \text { Before Revaluation } \
\hline \text { Building Gross Value } & 120,000 \
\hline \text { Building Accumulated Depreciation } & 40,000 \
\hline \text { Net carrying value } & 80,000 \
\hline
\end{array}$$ The fair value for the property is $40,000. Using straight-line depreciation and assuming that the property has a remaining depreciable life of 5 years, how much would be booked to accumulated depreciation in the year subsequent to the revaluation?
A)$8,000 credit.
B)$8,000 debit.
C)$16,000 credit.
D)$16,000 debit.

Quizplus · Accepted Answer

After revaluation, the new carrying amount is $40,000. With a remaining life of 5 years, annual depreciation is $40,000 / 5 = $8,000. Thus, $8,000 is credited to accumulated depreciation.

Wilson Inc Wishes to Use the Revaluation Model for This