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INTACC2 - Chapter 29

1. The document contains information about depreciation calculations for equipment and buildings. It provides original costs, accumulated depreciation, revaluation surpluses, estimated useful lives, and annual depreciation expenses. 2. One section shows the calculation of depreciation on the original cost of equipment and on the appreciated replacement cost over different time periods. 3. Another section calculates depreciation on a building using the proportional and elimination approaches to account for a revaluation surplus.

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630 views4 pages

INTACC2 - Chapter 29

1. The document contains information about depreciation calculations for equipment and buildings. It provides original costs, accumulated depreciation, revaluation surpluses, estimated useful lives, and annual depreciation expenses. 2. One section shows the calculation of depreciation on the original cost of equipment and on the appreciated replacement cost over different time periods. 3. Another section calculates depreciation on a building using the proportional and elimination approaches to account for a revaluation surplus.

Uploaded by

Shane Tabunggao
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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PROBLEM 29-2

1. Annual depreciation 750,000/5years = 150,000


3,000,000/150,000 or 5 years/25% = 20 years original useful life of equipment

2. Equipment 1,800,000
Accumulated Depreciation (1,800,000x25%) 450,000
Revaluation Surplus 1,350,000

3. Depreciation 3,600,000/15years 240,000


Accumulated Depreciation 240,000

Depreciation on cost 2,250,000


Depreciation on appreciation 1,350,000
Total depreciation 3,600,000

4. Revaluation surplus (1,350,000/15years) 90,000


Retained earnings 90,000

COST REPLACEMENT COST APPRECIATION


Equipment 3,000,000 4,800,000 1,800,000
Acc. Dep - 25% 750,000 1,200,000 450,000
CA/SV/RS 2,250,000 3,600,000 1,350,000

PROBLEM 29-5
Building 10,000,000
Accumulated Depreciation 4,000,000
Revaluation Surplus 6,000,000

Depreciation (13,000,000/5yrs) 2,600,000


Accumulated Depreciation 2,600,000

Revaluation Surplus 1,200,000


Retained Earnings (6,000,000/5yrs) 1,200,000

Cost 20,000,000
Residual Value 2,000,000
Depreciable Amount 18,000,000
6yrs
Annual depreciation 3,000,000
3 yrs
Depreciation expense 9,000,000
Carrying Amount 18,000,000
Proportion of acc dep 50%
to the original dep. Amount

COST REPLACEMENT COST


Building 20,000,000 30,000,000
Residual Value 2,000,000 4,000,000
Depreciable Amount 18,000,000 26,000,000
Annual Depreciation (50%) 9,000,000 13,000,000
Remaining depreciable amount 9,000,000 13,000,000
PROBLEM 29-3
PROPORTIONAL APPROACH
Building (8,000,000-5,000,000) 3,000,000
Accumulated Depreciation (3,000,000x25%) 750,000
Revaluation Surplus 2,250,000
# Gross replacement cost (6,000,000/75%) 8,000,000

Depreciation (8,000,000/40 or 6,000,000/30) 200,000


Accumulated Depreciation 200,000

Revaluation Surplus 75,000


Retained earnings (2,250,000/30 years) 75,000

ELIMINATION APPROACH
Accumulated Depreciation 1,250,000
Building 1,250,000

Building (6,000,000-3,750,000) 2,250,000


Revaluation Surplus 2,250,000

Depreciation (6,000,000/30yrs) 200,000


Accumulated Depreciation 200,000

Revaluation Surplus 75,000


Retained Earnings (2,250,000/30yrs) 75,000
MENT COST APPRECIATION
0,000 10,000,000
0,000
0,000 10,000,000
0,000 4,000,000
6,000,000

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