(Appendix) ABC Adheres to IFRS and Applies the Revaluation Model

question 90

Essay

(Appendix) ABC adheres to IFRS and applies the revaluation model to account for its Machinery.Prior to 2009,there was no balance in the company's Revaluation Surplus (OCI) accounts relating to its long-lived assets.The following year-end data pertains to the company's machinery: $$\begin{array} { l c c l } & \text { Cost } & \text { Accumulated Depreciation } & \text { Fair Value } \\2009 & \$ 100 & 0 & \$ 120 \\2010 & \$ 100 & 10 & \$ 60 \\2011 & \$ 100 & 20 & \$ 100\end{array}$$ Required:
For each year,provide the revaluation entries assuming that ABC applies:
a) The elimination method and,
b) The proportional method.

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Definitions:

Primary Source of Revenue

The main activity or operation that generates the majority of a company's income.

Wholesaler

A person or company that buys goods in large quantities from manufacturers and sells them in smaller amounts to retailers or professional users.

Sale of Merchandise

The transaction process that occurs when a business sells its products, typically recorded as revenue on the income statement.

Gross Profit

The difference between total revenue and the cost of goods sold, representing the basic profit from sales before deducting any operating expenses.