ACCA F3 Mock Exam Revaluation
Doing your ACCA F3 Exam ? Below is a mock exam question on Revaluation for you to attempt. You can right click your mouse and choose refresh to get another ACCA F3 Mock Exam question! Good luck to you!
At 31 December 2004 Q, a limited liability company, owned a building that cost $400,000 on 1 January 1995. It was being depreciated at two per cent per year.
On 1 January 2005 a revaluation to $600,000 was recognised. At this date the building had a remaining useful life of 70 years.
What is the depreciation charge for the year ended 31 December 2005 and the revaluation reserve balance as at 1 January 2005?
Answer : Depreciation charge per year = Cost / no of years
= $600,000 / 70
= $8,571.
Revaluation reserve Balance
= Assets revaluation amount - Net Assets value before revaluation
= 600,000 - 400,000 - 400,000 X 10 X 2%
= 600,000 - 320,000
=$280,000.