Use the Following Information to Answer This Question B) $\begin{array}{lll}\text { Machinery } & \mathrm{Dr} & 50,000 \\\text { Gain on revaluation \_ OCI } & \mathrm{Cr} && 50,000 \\\end{array}$

question 6

Multiple Choice

Use the following information to answer this question. The draft statement of financial position for Banjo Ltd as at 30 June 2021 discloses the following:
Machinery (at cost) $750 000
Less Accumulated depreciation 400 000 $350 000
On the same date, Banjo Ltd assessed the fair value of the machinery to be $400 000.
The tax rate is 30%. Depreciation rates are 10% p.a. (accounting) and 12.5% p.a. (tax) using the straight-line method.
In accordance with IAS 16 Property, Plant and Equipment, the journal entries necessary to record the revaluation of machinery (ignoring any tax effect) at 30 June 2021 is:

• A) \(\begin{array}{llll}
• \text { Accumulated depreciation - Machinery } & \mathrm{Dr} & 400,000 & \\
• \text { Machinery } & \mathrm{Cr} & & 400,000 \\
• & & & \\
• \text { Machinery } & \mathrm{Dr} & 50,000 & \\
• \text { Gain on revaluation\_OCI } & \mathrm{Cr} & & 50,000
• \end{array}\)
• B) \(\begin{array}{lll}
• \text { Machinery } & \mathrm{Dr} & 50,000 \\
• \text { Gain on revaluation \_ OCI } & \mathrm{Cr} && 50,000 \\
• \end{array}\)
• C) \(\begin{array}{lll}
• \text { Gain on revaluation \_ OCI } & \mathrm{Dr} & 50,000 \\
• \text { Asset revaluation surplus }& \mathrm{Cr} && 50,000 \\
• \end{array}\)
• D) \(\begin{array}{llr}
• \text { Machinery } & \mathrm{Dr} & 350,000 \\
• \text { Gain on revaluation - OCI } & \mathrm{Dr} & 50,000 \\
• \text { Accumulated depreciation } & - \mathrm{Cr}&&400,000\\\text { Machinery }
• \end{array}\)

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Definitions:

Black Pieces

In games like chess and checkers, the set of pieces designated by the color black, typically controlled by one of the two players.

Independent Events

Two events are independent if and only if the occurrence of one does not affect the probability of the other.

Disjunction

A logical operation yielding a true value if at least one of its operands is true; in grammar, it's the action of joining words or phrases in a way that indicates alternatives.

Occur

To happen or take place.