Smith Inc Wishes to Use the Revaluation Model for This

question 107

Multiple Choice

Smith Inc wishes to use the revaluation model for this property: The fair value for the property is $150,000. Assuming this is the first year of using the revaluation model, what amount would be booked to the "other comprehensive income" account if Smith chooses to use the proportional method to record the revaluation?

• A)$35,000 debit
• B)$35,000 credit
• C)$70,000 debit
• D)$70,000 credit

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Definitions:

Delegator

A party in a contract who transfers his or her duties to perform to a third party who is not part of the original contract (a delegatee).

Endorsement

The act of signing the back of a financial document or negotiable instrument, thereby transferring rights or authorizing actions related to the document.

Delegatee

A third party who is not part of the original contract but to whom duties to perform are transferred by one of the contracting parties (a delegator).

Order Instrument

An instrument payable to a specific, named payee.