Camco Manufacturers Inc., a publicly listed company, has two machines that are accounted for under the revaluation model. Technology in Camco'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, 2015. Camco has a December 31 year end.
Instructions
(a) Prepare the journal entries required for 2017, using the asset adjustment method.
(b) Prepare the journal entries required for 2017, using the proportionate method.
(c) Prepare a continuity schedule showing for each machine the amounts recorded to the Machine account and to the Accumulated Depreciation account, as well as indicating the carrying amount for each fiscal year from date of purchase to December 31, 2017, using
(1) The asset adjustment method and
(2) The proportionate method. Show the carrying amount under each method at the end of each fiscal year.
(d) Comment on the effects on the 2017 statement of comprehensive income with respect to parts (a) and (b).
(e) Comment on the effects on the December 31, 2017 statement of financial position with respect to parts (a) and (b).
(f) Would a potential investor prefer Camco to use the asset adjustment method or the proportionate method to apply the revaluation model?

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Machine #1 Jan. 2, 2014 $440,000 8 years Machine #2 Acquisition date Original cost Original estimate of useful life Original estimate of residual value Pattern of depreciation Fair value at Dec. 31, 2015 Balance in Machinery account after proportionate June 30, 2013 $540,000 12 years Straight-line 310,000 Straight-line 440,000 method revaluation on Dec. 31, 2015 proportionate method revaluation on Dec. 31, 2015 Revaluation Surplus (OCI) at Jan. 1, 2017 413,333 555,789 Balance in Accumulated Depreciation account after Cumulative balance in (Revaluation Gain or Loss)W Fair value at Dec. 31, 2017 103,333 115,789 (20,000) 230,000 12,500 328,000