Use the Following Information to Solve the Following Questions

question 33

Multiple Choice

Use the following information to solve the following questions:
Egypt Corp. owns equipment that originally cost $ 100,000. At December 31, 2020, the equipment's book value (after 2020 depreciation was booked) is $ 60,000. It is determined that the fair value of the equipment at this date is $ 90,000. Although Egypt's policy is to apply the revaluation model using the proportionate method, this is the first time the company has done it.
-By how much must the accumulated depreciation account be increased (decreased) at December 31, 2020?

• A) $ 20,000
• B) $ 40,000
• C) $ 60,000
• D) $ (60,000)

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Definitions:

Straight-Line Method

A method of calculating depreciation that spreads the cost of an asset evenly over its useful life.

Gain or Loss

The financial result from selling assets or settling liabilities at amounts different from their carrying amount, showing either a profit (gain) or deficit (loss).

Canadian Intellectual Property Office

A government agency responsible for the administration and processing of the intellectual property system in Canada.

Copyrights

Legal rights granted to an author, composer, playwright, publisher, or distributor to exclusively print, publish, perform, film, or record literary, artistic, or musical material.