1. Depreciation for 2021: $30,000
2. Revaluation: $18,000
3. Depreciation for 2022: $45,600
1. Depreciation for 2021
The equipment was purchased on March 31, 2021, so depreciation expense for 2021 is calculated as follows:
Depreciation expense = (Equipment cost / Useful life) * Time used
Depreciation expense = ($240,000 / 6 years) * 9 months
Depreciation expense = $40,000 * 0.75
Depreciation expense = $30,000
Therefore, the depreciation expense for 2021 is **$30,000**.
2-a. Revaluation of the equipment
The revaluation amount is the difference between the fair value of the equipment and its carrying amount. The carrying amount of the equipment on December 31, 2021, is:
Carrying amount = Equipment cost - Accumulated depreciation
Carrying amount = $240,000 - $30,000
Carrying amount = $210,000
Therefore, the revaluation amount is:
Revaluation amount = Fair value - Carrying amount
Revaluation amount = $228,000 - $210,000
Revaluation amount = $18,000
2-b. The journal entry to record the revaluation of the equipment
The journal entry to record the revaluation of the equipment is:
| Account | Debit | Credit |
| Revaluation gain | $18,000 | |
| Equipment | | $18,000 |
3. Depreciation for 2022
The depreciation expense for 2022 is calculated using the revised carrying amount of the equipment:
Depreciation expense = (Revised carrying amount / Remaining useful life)
Depreciation expense = ($228,000 / 5 years)
Depreciation expense = $45,600
Therefore, the depreciation expense for 2022 is $45,600.