Revaluation Model (Proportionate Method)

question 64

Essay

Revaluation model (proportionate method)
Mongolia Inc. owns equipment that it purchased on January 1, 2021, for $ 4 million.
The following additional information is available:
Dec. 31, 2021 – Book value (after recording 2021 depreciation): $ 3,600,000
Dec. 31, 2021 – Fair value: $ 4,100,000
The company uses the revaluation model (proportionate method) to account for its property, plant, and equipment.
Instructions 10-104
Assuming the entry for the current year's depreciation has already been recorded, prepare the entr(ies) to adjust the asset's carrying amount to fair value.

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Definitions:

Scienter

Knowledge by the misrepresenting party that material facts have been falsely represented or omitted with an intent to deceive.

Shares

Represents units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.

Popular

The term 'popular' is used to describe something widely liked, admired, or accepted by a large number of people.

Seller's Talk

A term used to describe the verbal communication or pitch by a seller aimed at persuading potential buyers to make a purchase.