Use the Following Information for Questions

question 29

Multiple Choice

Use the following information for questions.
On January 1, 2011, Fredo Inc.purchased equipment with a cost of €2,550,000, a useful life of
15 years and no salvage value.The company uses straight-line depreciation.At December 31, 2011, an independent appraiser determines that the fair value of the equipment is €2,500,000 Fredo prepares financial statements using IFRS and elects to revalue the asset.
-In the second step of the 2-step revaluation process at December 31, 2011, the journal entry to revalue the equipment will include a

• A)debit to Depreciation Expense for €255,000.
• B)credit to Equipment for €50,000.
• C)credit to Accumulated Depreciation for €170,000.
• D)credit to Revaluation Surplus for €150,000.

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