Platypus Ltd has an item of plant with a cost of $4 200,000, and at 30 June 20X5 the accumulated depreciation was $600,000 and its estimated residual amount $200,000.Platypus Ltd has adopted the revaluation model for the class of assets, but the asset has not previously been revalued.
-At reporting date, the directors determined that the asset's fair value was $3,750,000.What is the carrying amount of the asset at 30 June 20X4 and what type of revaluation - if any - was carried out during the reporting period and how was it recognised?
A)carrying amount $3,750,000; revaluation decrement $150,000 recognised as an expense
B)carrying amount $3,750,000; revaluation increment $150,000 recognised in the asset revaluation reserve
C)carrying amount $3,950,000; revaluation increment $250,000
D)carrying amount $3,950,000; revaluation decrement $250,000 recognised as a reduction in the asset revaluation reserve

Question

Quizplus · Accepted Answer

The Answer of Platypus Ltd has an item of plant with a cost of $4 200,000, and at 30 June 20X5 the accumulated depreciation was $600,000 and its estimated residual amount $200,000.Platypus Ltd has adopted the revaluation model for the class of assets, but the asset has not previously been revalued.
-At reporting date, the directors determined that the asset's fair value was $3,750,000.What is the carrying amount of the asset at 30 June 20X4 and what type of revaluation - if any - was carried out during the reporting period and how was it recognised?
A)carrying amount $3,750,000; revaluation decrement $150,000 recognised as an expense
B)carrying amount $3,750,000; revaluation increment $150,000 recognised in the asset revaluation reserve
C)carrying amount $3,950,000; revaluation increment $250,000
D)carrying amount $3,950,000; revaluation decrement $250,000 recognised as a reduction in the asset revaluation reserve

Platypus Ltd Has an Item of Plant with a Cost