Financial Accounting 2a Questions And Answers Pdf Guide
Carrying amount before revaluation (31 Dec 2022) = 500,000 – (20,000 × 3) = $440,000 Fair value = $600,000 → Revaluation surplus = $160,000
Suitable for: Second-year university, Diploma in Accounting, or IFRS foundations. Topic 1: Property, Plant & Equipment (Revaluation Model) Question 1 On 1 Jan 2020, Company X bought a building for $500,000 (useful life: 25 years, residual value: $0). On 31 Dec 2022, fair value was assessed at $600,000. The company uses the revaluation model and straight-line depreciation.
Dr Retained earnings (120k × 0.10) 12,000 Cr Dividend payable 12,000 Where to Find Real PDFs for "Financial Accounting 2A" To get actual past exam papers + memos in PDF format, try these legitimate sources: financial accounting 2a questions and answers pdf
Calculate deferred tax asset/liability at end of Year 1. Solution 3 Carrying amount (CA): 100,000 – 20,000 = $80,000 Tax base (TB): 100,000 – 40,000 = $60,000 Temporary difference: CA – TB = 20,000 (taxable temporary difference) Deferred tax liability: 20,000 × 30% = $6,000
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| Account | Debit | Credit | |---------|-------|--------| | Building – Accumulated Depreciation | 60,000 | | | Building – Cost | | 60,000 | (To eliminate accumulated depreciation) | | | | Building – Cost (600k – 440k) | 160,000 | | | Revaluation Surplus (OCI) | | 160,000 |
a) Calculate interest expense for Year 1. b) Journal entry for first payment. c) Liability balance after Year 1 payment. Solution 2 a) Interest expense Year 1: 42,124 × 6% = $2,527 The company uses the revaluation model and straight-line
a) Calculate depreciation for 2020, 2021, 2022. b) Prepare journal entries for the revaluation on 31 Dec 2022. c) Show the extract of Statement of Financial Position as at 31 Dec 2022. Solution 1 a) Depreciation: Annual depreciation = 500,000 / 25 = $20,000 2020: $20,000 2021: $20,000 2022: $20,000