Palm Beach Ltd Has Elected to Adopt the Allowed Alternative

question 59

Multiple Choice

Palm Beach Ltd has elected to adopt the allowed alternative treatment to account for some of its property, plant and equipment. The information available for the class of assets the entity wishes to covert to revaluation model follows:

Which of the following statements are correct if Palm Beach Ltd is to comply with AASB 116?

• A) When office equipment is revalued, net profit will increase $10,000.
• B) When machinery is revalued, net profit will increase by $2,500.
• C) When motor vehicles are revalued, net profit will decrease by $16,000.
• D) When all assets are revalued, net profit will increase by $8,500.
• E) When all assets are revalued, net profit will decrease by $18,500 and asset revaluation reserve is increased by 8,500.

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Definitions:

Bribe or Kickback

Illegal or unethical payments made to secure advantage or favour in a commercial or official transaction.

Ethical Dilemma

A situation where making a decision involves a conflict between moral imperatives, where to obey one would result in transgressing another.

Recognize

To identify something or someone as being previously known; acknowledging the existence, validity, or legality of something.

Spotlight Questions

Specific, targeted questions intended to uncover detailed information, insights, or perspectives, often used in interviews or analysis.