Brahms Ltd Acquired a Property of Land and Building for $1.5

question 28

Multiple Choice

Brahms Ltd acquired a property of land and building for $1.5 million.Management estimates the value of land to be 40% of cost.The building is estimated to have a useful life of 50 years.After 25 years,the property was revalued at 1.2 million.It is expected that the life of the building will remain the same and salvage value is expected to be $100 000.What is the revaluation gain(loss) for the building and the depreciation expense one year after revaluation?

• A) $120 000; $24 800
• B) ($120 000); $28 800
• C) $220 000; $24 800
• D) ($220 000); $28 800

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Definitions:

Chapter 12

A chapter of the Bankruptcy Code specifically designed to address the financial restructuring of family farmers and fishermen.

Farmers

Individuals or entities engaged in the act of agriculture, growing crops and/or raising animals.

Unsecured Debts

Debts that are not backed by an asset or collateral, increasing the risk for lenders if the borrower defaults.

Chapter 7

A chapter of the U.S. Bankruptcy Code that involves the liquidation of a debtor's assets to pay off creditors.