ABC Inc. has substantial Machinery & Equipment. The company applies the Revaluation Surplus model for these assets. The company had no Revaluation Surplus OCI - Machinery on its books for these assets:
Book Values (after taking depreciation but before revaluation entry) and Fair Values for the following 2 years are shown below: (the table values are in 000's) :
$\begin{array} { | l | l | l | } \hline & \text { BV } & \text { FV } \\\hline \text { December 31, Year 2 } & 60 & 90 \\\hline \text { December 31, Year 3 } & 120 & 80 \\\hline\end{array}$
$\begin{array} { | l | l | l | } \hline & \text { BV } & \text { FV } \\\hline \text { December 31, Year 2 } & 60 & 90 \\\hline \text { December 31, Year 3 } & 120 & 80 \\\hline\end{array}$

-ABC's December 31^st, Year 3 revaluation entry would include:

Question

ABC Inc. has substantial Machinery & Equipment. The company applies the Revaluation Surplus model for these assets. The company had no Revaluation Surplus OCI - Machinery on its books for these assets:
Book Values (after taking depreciation but before revaluation entry) and Fair Values for the following 2 years are shown below: (the table values are in 000's) :

\begin{array} { | l | l | l | } \hline & \text { BV } & \text { FV } \\\hline \text { December 31, Year 2 } & 60 & 90 \\\hline \text { December 31, Year 3 } & 120 & 80 \\\hline\end{array}

\begin{array} { | l | l | l | } \hline & \text { BV } & \text { FV } \\\hline \text { December 31, Year 2 } & 60 & 90 \\\hline \text { December 31, Year 3 } & 120 & 80 \\\hline\end{array}

-ABC's December 31^st, Year 3 revaluation entry would include:

Quizplus · Accepted Answer

The revaluation surplus from Year 2 was $30,000 ($90,000 FV - $60,000 BV). In Year 3, the FV decreased to $80,000, resulting in a $40,000 decrease from the Year 3 BV of $120,000. The first $30,000 of this decrease reverses the revaluation surplus, and the remaining $10,000 is recognized as a loss on the income statement.

ABC Inc Has Substantial Machinery & Equipment -ABC's December 31st, Year 3 Revaluation Entry Would Include: A)

ABC Inc Has Substantial Machinery & Equipment -ABC's December 31^st, Year 3 Revaluation Entry Would Include:
A)