Peters Ltd Has a Machine That Originally Cost $20 000

Multiple Choice

Peters Ltd has a machine that originally cost $20 000 and has accumulated depreciation of $5000.Its remaining life is assessed to be 5 years with no salvage value.The directors of Peters Ltd decide on 1 July 2003 to revalue the machine.They are unable to find market information on a machine in a similar state to theirs,so the market value of a new machine of the same type,$30 000,is used as a basis.What is/are the appropriate journal entry(ies) using the gross method to record the revaluation?

A)
$$\begin{array} { | l | l | r | r | } \hline \mathrm { Dr } & \text { Accumulated depreciation-machine } & 5000 & \\\hline \mathrm { Cr } & \text { Machine } & & 5000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Machine } & 15000 & \\\hline \mathrm { Cr } & \text { Asset revaluation reserve } & & 15000 \\\hline\end{array}$$
B)
$$\begin{array} { | l | l | r | r | } \hline \mathrm { Dr } & \text { Machine } & 15000 & \\\hline \mathrm { Cr } & \text { Accumulated depreciation } & & 5000 \\\hline \mathrm { Cr } & \text { Asset revaluation reserve } & & 10000 \\\hline\end{array}$$
C)
$$\begin{array} { | l | l | l | l | } \hline \mathrm { Dr } & \text { Machine } & 10000 & \\\hline \mathrm { Cr } & \text { Accumulated depreciation } & & 2500 \\\hline \mathrm { Cr } & \text { Asset revaluation reserve } & & 7500 \\\hline\end{array}$$
D)
$$\begin{array} { | l | l | r | r | } \hline \mathrm { Dr } & \text { Accumulated depreciation-machine } & 5000 & \\\hline \mathrm { Cr } & \text { Asset revaluation reserve } & & 5000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Machine } & 15000 & \\\hline \mathrm { Cr } & \text { Asset revaluation reserve } & & 15000 \\\hline\end{array}$$