Staples Ltd Has Invested in Two Parcels of Land That

question 65

Multiple Choice

Staples Ltd has invested in two parcels of land that are treated as belonging to the same class of assets.The first parcel of land was purchased for $500 000 and has been valued this period at $650 000.The second parcel of land has a carrying value of $340 000 and has been valued this period at $100 000.What is the appropriate journal entry to record the revaluations?

• A)
• \[\begin{array} { | c | l | c | c | }
• \hline \mathrm { Dr } & \text { Land (parcel 1) } & 150000 & \\
• \hline \mathrm { Cr } & \text { Asset revaluation reserve } & & 150000 \\
• \hline & & & \\
• \hline \mathrm { Dr } & \text { Asset revaluation reserve } & 240000 & \\
• \hline \mathrm { Cr } & \text { Land (parcel 2) } & & 240000 \\
• \hline
• \end{array}\]
• B)
• \[\begin{array} { | c | l | c | c | }
• \hline \mathrm { Dr } & \text { Land (parcel 1) } & 150000 & \\
• \hline \mathrm { Cr } & \text { Asset revaluation reserve } & & 150000 \\
• \hline & & & \\
• \hline \mathrm { Dr } & \text { Loss on revaluation of land } & 240000 & \\
• \hline \mathrm { Cr } & \text { Land (parcel 2) } & & 240000 \\
• \hline
• \end{array}\]
• C)
• \[\begin{array} { | l | l | r | r | }
• \hline \mathrm { Dr } & \text { Asset revaluation reserve } & 90000 & \\
• \hline \mathrm { Cr } & \text { Land } & & 90000 \\
• \hline
• \end{array}\]
• D)
• \[\begin{array} { | l | l | r | r | }
• \hline \mathrm { Dr } & \text { Loss on revaluation of land } & 90000 & \\
• \hline \mathrm { Dr } & \text { Land (parcel 1) } & 150000 & \\
• \hline \mathrm { Cr } & \text { Land (parcel 2) } & & 240000 \\
• \hline
• \end{array}\]

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