Cpa Review School of The Philippines Manila
Cpa Review School of The Philippines Manila
Cpa Review School of The Philippines Manila
Manila
FINANCIAL ACCOUNTING AND REPORTING VALIX/VALIX/ESCALA/SANTOS/DELA CRUZ
REVALUATION
1. An entity acquired a building on January 1, 2018 at a cost of P20,000,000. The building had a useful
life of 6 years and residual value of P2,000,000. The building was revalued on January 1, 2021 and
the revaluation revealed replacement cost of P30,000,000, residual value of P4,000,000 and revised
useful life of 8 years from the date of acquisition. The income tax rate is 25%.
1. What is the revaluation surplus on December 31, 2021?
a. 6,000,000
b. 3,600,000
c. 4,500,000
d. 7,500,000
2. What amount should be reported as depreciation for 2021?
a. 2,600,000
b. 3,400,000
c. 3,000,000
d. 1,400,000
2. On January 1, 2016, an entity purchased a new building at a cost of P6,000,000. Depreciation was
computed on the straight line basis at 4% per year. On January 1, 2021, the building had a fair value
of P8,000,000.
1. What amount should be recorded as depreciation for 2021?
a. 320,000
b. 400,000
c. 100,000
d. 240,000
2. What is the pretax revaluation surplus on December 31, 2021?
a. 3,072,000
b. 1,900,000
c. 3,040,000
d. 1,920,000
3. On January 1, 2021, an entity showed land with carrying amount of P10,000,000 and building with
cost of P60,000,000 and accumulated depreciation of P18,000,000. The land and building were
revalued on same date and revealed the fair value of land at P17,000,000 and the building at
P70,000,000. The original useful life of the building is 20 years and depreciation is computed on the
straight line.
1. What is the pretax revaluation surplus on January 1, 2021?
a. 35,000,000
b. 45,000,000
c. 28,000,000
d. 47,000,000
2. What is the pretax revaluation surplus on December 31, 2021?
a. 32,500,000
b. 35,000,000
c. 28,000,000
d. 33,000,000
3. What amount should be reported as depreciation for 2021?
a. 5,000,000
b. 3,500,000
c. 4,500,000
d. 3,000,000
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