A Machine Purchased by White Plc Had a Cost of €670

question 17

Multiple Choice

A machine purchased by White Plc had a cost of €670 000 and an accumulated depreciation balance of €120 000 at 30 June 2012.Its fair value is assessed at this time,with its first revaluation as €450 000.What is/are the appropriate journal entry(ies) to record the revaluation using the net method?

• A) \[\begin{array} { | l | l | l | l | }
• \hline \text { Dr } & \text { Accumulated depreciation —machine } & 120000 & \\
• \hline \mathrm { Cr } & \text { Machine } & & 120000 \\
• \hline & & & \\
• \hline \mathrm { Dr } & \text { Asset revaluation reserve } & 100000 & \\
• \hline \mathrm { Cr } & \text { Machine } & & 100000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | l | l | }
• \hline \text { Dr } & \text { Loss on revaluation of machine } & 220000 & \\
• \hline \mathrm { Cr } & \text { Machine } & & 220000 \\
• \hline
• \end{array}\]
• C) \(\begin{array}{|c|l|c|c|}
• \hline \mathrm{Dr} & \text { Accumulated depreciation-machine } & 120000 & \\
• \hline \mathrm{Cr} & \text { Machine } & & 120000 \\
• \hline & & & \\
• \hline \mathrm{Dr} & \text { Asset revaluation reserve } & 100000 & \\
• \hline \mathrm{Cr} & \text { Accumulated depreciation-machine } & & 100000 \\
• \hline
• \end{array}\)
• D) \(\begin{array}{|c|l|c|c|}
• \hline \mathrm{Dr} & \text { Accumulated depreciation-machine } & 120000 & \\
• \hline \mathrm{Cr} & \text { Machine } & & 120000 \\
• \hline & & & \\
• \hline \mathrm{Dr} & \text { Loss on revaluation of machine } & 100000 & \\
• \hline \mathrm{Cr} & \text { Machine } & & 100000 \\
• \hline
• \end{array}\)

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Definitions:

Reversible Thinking

The ability to recognize that actions or processes can be undone, leading to the original state or condition.

Centration

A cognitive limitation in early childhood, where a child focuses on one aspect of a situation or object and ignores others.

Formal Operations

The final stage in Piaget's theory of cognitive development, characterized by the ability to think abstractly, reason logically, and manage hypothetical situations.

Sequential

Describes a process that follows a specific order or sequence, where each step or stage comes one after the other in a logical progression.