Cameo Manufacturers Inc., a publicly listed company, has two machines that are accounted for under the revaluation model. Technology in Cameo's industry is fast-changing, causing the fair value of each machine to change significantly approximately every two years. The following information is available:

Both machines were last revalued on December 31, 2012. Cameo has a December 31 year end.
Instructions
(a) Prepare the journal entries required for 2014, using the asset adjusonent method.
(b) Prepare the journal entries required for 2014, using the proportionate method.
(c) Comment on the effects on the 2014 statement of comprehensive income with respect to parts (a) and (b).
(d) Comment on the effects on the December 31,2014 statement of financial position with respect to parts (a) and (b).
(e) Would a potential investor prefer Cameo to use the asset adjustment method or the proportionate method to apply the revaluation model?

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Machine #1 Jan. 2, 2011 350,000 8 years Machine #2 June 30, 2010 540,000 12 years Acquisition date Original cost Original estimate of useful life Original estimate of residual value Pattern of depreciation Fair value at Dec. 31, 2012 Balance in Machinery account after proportionate Straight-line 225,000 Straight-line 440,000 method revaluation on Dec. 31, 2012 proportionate method revaluation on Dec. 31, 2012 (Revaluation Gain or Loss at Jan. 1, 2014 300,000 555,789 Balance in Accumulated Depreciation account after Cumulative balance in Revaluation Surplus (OCI) Fair value at Dec. 31, 2014 75,000 115,789 (37,500) 190,000 12,500 328,000