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Question - An equipment was acquired for 3,000,000 on Jan. 1, 2018. It is being depreciated to a salvage value of 400,000 over 10 years. It has the following revaluation details: (A) Jan. 1, 2021 - Replacement cost of 4,100,000 and remaining useful life of 7 years, (B) Jul. 1, 2026 - Replacement cost of 3,500,000 and remaining useful life of 3 years.
After recording the depreciation as of Jul. 1, 2026, what is the journal entry to record the change in revaluation using the proportionate method? How much should be (debited) or credited to revaluation surplus? Solutions must be in good accounting form.
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