Chapter 19 Problem 19-10
Replacement
Cost cost Appreciation
Land 5,000,000 10,000,000 5,000,000
Building 25,000,000 45,000,000 20,000,000
Accumulated depreciation
(25,000,000 x 3/25) 3,000,000
(45,000,000 x 3/25) _________ 5,400,000 2,400,000
22,000,000 39,600,000 17,600,000
Machinery 10,000,000 15,000,000 5,000,000
Accumulated depreciation
(10,000,000 x 3/5) 6,000,000
(15,000,000 x 3/5) __________ 9,000,000 3,000,000
4,000,000 6,000,000 2,000,000
Replacement
Cost cost Appreciation
Equipment 3,000,000 4,200,000 1,200,000
Accumulated depreciation
(3,000,000 x 3/10) 900,000
(4,200,000 x 3/10) _________ 1,260,000 _ 360,000
2,100,000 2,940,000 840,000
a. Land 5,000,000
Building 20,000,000
Machinery 5,000,000
Equipment 1,200,000
Accumulated depreciation – building 2,400,000
Accumulated depreciation – machinery 3,000,000
Accumulated depreciation – equipment 360,000
Revaluation surplus 25,440,000
b. Depreciation 5,220,000
Accumulated depreciation – building 1,800,000
Accumulated depreciation – machinery 3,000,000
Accumulated depreciation – equipment 420,000
250
Building:
Cost (22,000,000 / 22) 1,000,000
Appreciation (17,600,000 / 22) 800,000 1,800,000
Machinery:
Cost (4,000,000 / 2) 2,000,000
Appreciation (2,000,000 / 2) 1,000,000 3,000,000
Equipment:
Cost (2,100,000 / 7) 300,000
Appreciation (840,000 / 7) 120,000 420,000
Total depreciation 5,220,000
c. Revaluation surplus 1,920,000
Retained earnings (800,000 + 1,000,000 + 120,000) 1,920,000
d. Property, plant and equipment (at revalued amounts):
Land 10,000,000
Building 45,000,000
Machinery 15,000,000
Equipment 4,200,000
Total 74,200,000
Less: Accumulated depreciation 20,880,000
Net carrying value 53,320,000
The following disclosure should be made in the notes to financial statements:
Replacement
Cost cost
Land 5,000,000 10,000,000
Building 25,000,000 45,000,000
Machinery 10,000,000 15,000,000
Equipment 3,000,000 4,200,000
Total 43,000,000 74,200,000
Accumulated depreciation 13,200,000 20,880,000
Net carrying value 29,800,000 53,320,000
Schedule of Accumulated Depreciation
Replacement
Cost cost
Building 4,000,000 7,200,000
Machinery 8,000,000 12,000,000
Equipment 1,200,000 1,680,000
13,200,000 20,880,000
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