CHAPTER 2 Sample Solution


Land and Buildings Opening Balance 450,000 + 300,000


(a) 01/01/2008 Balance 01/01/2009 Balance


01/01/2010 Balance 01/01/2010 Bank


01/01/2011 Balance 01/01/2012 Balance 01/01/2012 Revaluation 01/01/2013 Balance [1]


Land & Buildings Account [1]


750,000 01/01/2008 Revaluation [1]


200,000 31/12/2008 Balance 950,000


950,000 01/01/2009 Disposal 31/12/2009 Balance


950,000 610,000


[3] 650,000 31/12/2010 Balance 1,260,000 1,260,000


01/01/2011 Revaluation [2] 126,000 31/12/2011 Balance 1,386,000


1,386,000 01/01/2012 Disposal [3] 85,000 31/12/2012 Balance 1,471,000 800,000


[1]


950,000 950,000 340,000 610,000 950,000


1,260,000 1,260,000


[3]


1,386,000 1,386,000 671,000 800,000


1,471,000


Revaluation 01/01/2008 950,000 - 750,000


340,000 is the revalued amount.


650,000 is the total purchases and work done.


1,260,000 @10%.


800,000 - 715,000 Tracking the new buildings will help you get this figure.


671,000 is the amount the old buildings were valued at. Tracking the old buildings will help you get this figure.


01/01/2008 Revaluation [2] 01/01/2008 Balance


01/01/2009 Balance 31/12/2010 Balance


01/01/2011 Revaluation [2] 31/12/2011 Balance


01/01/2012 Disposal


01/01/2012 Revaluation [3] 31/12/2012 Balance


Provision For Depreciation Account 27,000 01/01/2008 Balance 12,200 31/12/2008 P & L 39,200


01/01/2009 Balance


24,400 31/12/2009 P & L 24,400


01/01/2010 Balance


49,600 31/12/2010 P & L 49,600


49,600 01/01/2011 Balance 27,720 31/12/2011 P & L 77,320


[2] 13,420 01/01/2012 Balance 14,300 31/12/2012 P & L


16,000 43,720


01/01/2013 Balance [2] [2] [2] [2] [2] [2]


27,000 12,200 39,200 12,200 12,200 24,400 24,400 25,200 49,600 49,600 27,720 77,320 27,720 16,000


43,720 16,000


13,420 +14,300 = 27,720. You divided out the depreciation, some into the Disposal Account and the remainder into the Revaluation Account.


Depreciation Opening Balance 450,000 @2% for 3 years


P & L 2008 610,000 @ 2%


P & L 2009 610,000 @ 2%


P & L 2010 1,260,000 @ 2% P & L 2011 1,386,000 @ 2%


Disposal Old Buildings 671,000 @ 2%


Revaluation 715,000 @ 2%


P & L 2012 800,000 @ 2%


2


17


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