XYZ Bhd. purchased a land and building at a cost of Dh10,000,000 in 2005. The land portion accounted for Dh2,000,000 of the purchase price. The building was depreciated on a straight line basis over 50 years, charging a full year’s provision in the year of purchase and none in the year of disposal

On 1 January 2007, the land and building was revalued upward. An independent professional valuer placed valuation of Dh18,000,000 on the existing use basis, of which Dh4,000,000 was attributable to the land portion. The surplus was incorporated in the accounts.

In 2009 the property was sold for Dh20,000,00 cash.

Required:

Record the above transactions in the following accounts:

1. Land and building
2. Accumulated depreciation
3. Asset revaluation reserve
4. Disposal

Answer rating: 100% (QA)

2005 Land 2000000 Building 8000000 Cash 10000000 Purchase of land building 31122005 ... View the full answer