HK Ltd's Balance Sheet at 30 June 2015 Disclosed the Following

question 2

Multiple Choice

HK Ltd's balance sheet at 30 June 2015 disclosed the following.
$
Buildings 450 000
Less accumulated depreciation 120 000
330 000
On 1 July 2015 the director of HK decided to revalue the buildings to a fair value of $400 000.The general journal entry to record the revaluation is which of the following?

• A)Debit gain on revaluation $70 000; credit buildings $70 000
• B)Debit accumulated depreciation buildings $70 000; credit gain on revaluation $70 000
• C)Debit accumulated depreciation buildings $120 000; credit gain on revaluation $70 000; credit buildings $50 000
• D)Debit accumulated depreciation buildings $120 000; credit income account $70 000; credit buildings $50 000

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Definitions:

Arithmetic Average Return

The simple mean of a series of returns generated over a period of time.

Dollar-Weighted Return

A method of calculating an investment's return that accounts for the timing and amount of cash flows into the investment.

Arithmetic Average

The simple mean calculated by adding a set of values and then dividing by the number of values.

Geometric Average

The nth root of the product of n numbers, used to calculate average rates of return over time for investments that undergo compounding.