Sterling Company wishes to revalue some equipment with an original cost of $200 000 and accumulated depreciation of $30 000.The equipment now has a fair value of $100 000.What revaluation will be recorded?

Question

Quizplus · Accepted Answer

When revaluing an asset, the new value is compared to the carrying amount, which is the original cost minus accumulated depreciation. In this case, the carrying amount is $170,000 ($200,000 - $30,000). Since the fair value of the equipment is now only $100,000, there is a decrement of $70,000 ($170,000 - $100,000). Therefore, the correct answer is D.

Sterling Company Wishes to Revalue Some Equipment with an Original