Grover Inc Wishes to Use the Revaluation Model for This

question 100

Multiple Choice

Grover Inc wishes to use the revaluation model for this property: $$\begin{array} { | l | r | } \hline & \text { Before Revaluation } \\\hline \text { Building Gross Value } & 120,000 \\\hline \text { Building Accumulated Depreciation } & 40,000 \\\hline \text { Net carrying value } & 80,000 \\\hline\end{array}$$
-According to the table above.The fair value for the property is $100,000. What amount would be booked to the "accumulated depreciation" account if Grover chooses to use the proportional method to record the revaluation?

• A)$0
• B)$10,000 debit.
• C)$10,000 credit.
• D)$20,000 credit.

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Definitions:

Sunk Costs

Costs that have been incurred and cannot be recovered, not affecting future business decisions.

Tax Liability

The amount of taxation that a business or individual owes to a taxing authority, typically calculated based on income or transactions.

Salvage Value

The estimated residual value of an asset at the end of its useful life, used in accounting for depreciation calculations.

Estimating Cash Flows

The process of forecasting the amounts of cash that will be received and spent by a business in a future period.