Clause Corp has a piece of equipment (a sleigh ) with an original cost of $2,880,000....

 

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Clause Corp has a piece of equipment (a sleigh Ⓒ) with an original cost of $2,880,000. The equipment's carrying value at the beginning of this year (net of accumulated depreciation) was $2,160,000. Clause Corp recorded $240,000 for depreciation for this year. The equipment's fair value at the end of the year was $2,112,000. This is the first year that the company has revalued this equipment. Required: a. Record the journal entry for the revaluation adjustment assuming that Clause Corp uses the elimination method. b. Record the journal entry for the revaluation adjustment assuming that Clause Corp uses the proportional method. c. How would your response to part a. and b. change if Clause Corp had previously recognized a revaluation loss on the sleigh of $100,000? Clause Corp has a piece of equipment (a sleigh Ⓒ) with an original cost of $2,880,000. The equipment's carrying value at the beginning of this year (net of accumulated depreciation) was $2,160,000. Clause Corp recorded $240,000 for depreciation for this year. The equipment's fair value at the end of the year was $2,112,000. This is the first year that the company has revalued this equipment. Required: a. Record the journal entry for the revaluation adjustment assuming that Clause Corp uses the elimination method. b. Record the journal entry for the revaluation adjustment assuming that Clause Corp uses the proportional method. c. How would your response to part a. and b. change if Clause Corp had previously recognized a revaluation loss on the sleigh of $100,000?

Answer rating: 100% (QA)

Particular Original Cost Accmulated a Carrying value Depreciation by ... View the full answer