Grover Inc wishes to use the revaluation model for this property:

The fair value for the property is $100,000.What amount would be booked to the "accumulated depreciation" account if Grover chooses to use the proportional method to record the revaluation?
A)$0
B)$10,000 debit.
C)$10,000 credit.
D)$20,000 credit.

Question

Grover Inc wishes to use the revaluation model for this property:

The fair value for the property is $100,000.What amount would be booked to the "accumulated depreciation" account if Grover chooses to use the proportional method to record the revaluation?
A)$0 
B)$10,000 debit. 
C)$10,000 credit. 
D)$20,000 credit.

Quizplus · Accepted Answer

C)Amount of revaluation = (100 - 80)/ 80 = 25% revaluation gain/credit
Proportional increase in accumulated depreciation = 40,000 × 25% = 10,000 credit

Grover Inc Wishes to Use the Revaluation Model for This