Smith Inc Wishes to Use the Revaluation Model for This

question 21

Multiple Choice

Smith Inc wishes to use the revaluation model for this property:

The fair value for the property is $150,000.Using straight-line depreciation and assuming that the property has a remaining depreciable life of 5 years,how much would be booked to accumulated depreciation in the year subsequent to the revaluation?

• A)$12,000 debit.
• B)$12,000 credit.
• C)$30,000 credit.
• D)$30,000 debit.

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Definitions:

Investor

An individual or entity that allocates capital with the expectation of receiving financial returns.

Nominal Interest Rate

The interest rate as stated on a loan or financial product, not taking into account inflation or fees.

Annual Compounding

The method of accruing interest on the main amount of a deposit or loan annually.

Semi-annual Compounding

The process of calculating interest where the accumulated interest is added to the principal sum twice a year.