Question
A building has cost $800,000 and accumulated depreciation $240,000. Remaining useful life: 10 years. At the revaluation date, fair value is $650,000, with residual value after revaluation of $10,000. The building is subsequently sold four years later for $500,000.
Required: Calculate the carrying amount before revaluation, the revaluation surplus, depreciation after revaluation, carrying amount at disposal, and the gain/loss on disposal.
Statements in this challenge
- Carrying Amount Before RevaluationNumeric Answer
- Revaluation SurplusNumeric Answer
- Depreciation After RevaluationNumeric Answer
- Carrying Amount at DisposalNumeric Answer
- Gain on DisposalNumeric Answer
Scoring
- 40% Account naming / line matching
- 40% Amount correctness
- 20% Structure / section placement
How to approach this
IAS 1 — Presentation of Financial Statements
A composite challenge links several statements built from one set of data, so figures flow between them: profit reaches retained earnings, and the closing balances feed the position statement. Complete them in the order the statements depend on each other rather than the order of the tabs.
Common mistakes
- Preparing each statement independently, so the linking figures disagree.
- Carrying a figure forward before finishing the adjustments that change it.
- Reworking a linked figure in one statement without updating it in the others.
Further readingIAS 1: what goes where in a full set of statements