Jassa Brothers Ltd, Purchases a machine at a cost of $200 000 and accumulated depreciation of$25 000. The machine is revalued to $225 000 at the beginning of the year, Depreciation for the year is based on the revalued amount and the remaining useful life of 10 years. Shareholders' equity, before adjusting for the above revaluation and subsequent depreciation, is as follows: Share Capital $ 300,000 Revaluation Surplus $45,000 Capital Profit Reserve $85,000 Retained Earnings $70,000 Total $500.000. 

1.Prepare journal entries to reflect the revaluation of the asset and the subsequent depriciation of the revalued asset. 

2. Which of the equity accounts would be affected directly or indirectly by the revaluation?

Answer rating: 100% (QA)

1 Journal Entries a Revaluation of the asset Date Date Revaluation Surplus 25000 Accumulated Depreci... View the full answer