Question Solved1 Answer An entity purchased peoperty for $ 8 million on 1 July 20X3 . The land element of the purchase was $ 2 million . The expected life of the building was 50 years and its residual value nil . On 30 June 20X5 the property was revalued to $ 10million , of which the land element was $ 3 million and the buildings $ 7 million . On 30 June 20X7 , the property was sold for $ 9.2 million . a ) Calculate gain / loss on revaluation b ) Show double entry to record gain / loss calculated above c ) Calculate gain loss on disposal

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An entity purchased peoperty for $ 8 million on 1 July 20X3 . The land element of the purchase was $ 2 million . The expected life of the building was 50 years and its residual value nil . On 30 June 20X5 the property was revalued to $ 10million , of which the land element was $ 3 million and the buildings $ 7 million . On 30 June 20X7 , the property was sold for $ 9.2 million .

a ) Calculate gain / loss on revaluation

b ) Show double entry to record gain / loss calculated above

c ) Calculate gain loss on disposal

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On 1 July 2013:  Land= 2 million Building = (8 - 2) million = 6 million Depreciation per annum on Building = 6 million50     = 0.12 million per annum   Written Down value of land and building as on 30 June 15 =  Land (Non Depreciable) = 2 million Building = (8 - 0.12 - 0.12) million = 7.76 million Total (Land and Building) = 9.76 millions   Value given in question after revaluation = 10 million (a) Therefore, Total Gain on revaluation = (10 - 9.76) = 0.24 million Gain on revaluation of land = 3 million - 2 million  = 1 million Gain on revaluation of Building = 7 million - 7.76 million = (0.76 million) = Loss of 0.76 million     (b) Journal Entry to record the gain on revaluation is as follows: Land a/c Dr.        &# ... See the full answer