1.【單選題】A company bought a building five years ago on 1 January for $ 180,000. The building has a useful life of 30 years when it was purchased and has nil residual value. Since then building price has risen substantially and was revalued at $250,000.
What is the balance on the revaluation surplus reported in the statement of financial position?
2.【單選題】 On 1 July 20X5 a company purchased a motor vehicle for $30,000. It is depreciated at 20 per cent per year on the straight-line basis, assuming a scrap value is $5,000, with a proportionate depreciation charge in the years of purchase and disposal.
The cost of $30,000 was correctly entered in the cash book but posted to the debit of the motor vehicles repairs account.
How will the business profit for the year ended 31 December 20X5 be affected by the error?
選項：A. Understated by $25,000
B. Understated by $27,500
C. Overstated by $25,000
D. Overstated by $27,500