Sea Otter Ltd Uses the Revaluation Model for All Classes

question 13

Multiple Choice

Sea Otter Ltd uses the revaluation model for all classes of property, plant and equipment. The following information relates to two items of nlant the CRM650 and DRM700

$\begin{array}{llcc} \text { } & \text { CRM650}& \text {DRM700} \\ \text {Cost (acquisition date \( 1 / 1 / 20 \mathrm{X} 1 \) ) } &\$5000000&\$8000000\\ \text { Useful life - taxation } &8\text {years}&8\text {years} \\ \text { Useful life - accounting } &10\text {years}&5\text {years}\\ \text { Fair value \( 36 / 06 / 20 \mathrm{X} 2 \) } &\$5400000&\$7500000\\ \text { } &\\\end{array}$

-For the DRM700, the revaluation on 30/06/20X2 results in:

• A)a deferred tax expense and DTL of $150 000, and asset revaluation reserve decrement of $350 000
• B)a deferred tax expense and DTL of $307 500, and asset revaluation reserve increment of $717 500
• C)a deferred tax expense and DTL of $150 000, and asset revaluation reserve increment of $350 000
• D)a taxable temporary difference of $500 000, asset revaluation reserve increment of $500 000 and a deferred tax expense and DTL of $150 000.

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Definitions:

Organizational Culture

The set of shared values, beliefs, behaviors, and practices that influences the way employees behave within an organization.

Artifacts

Physical objects produced or used by humans, often studied to understand historical, cultural, or social contexts.

Values

Core principles or standards that guide behavior and decision-making, reflecting what is important to an individual or group.

Organizational Culture

The shared values, beliefs, and norms that shape the social and psychological environment of a business organization.