Sigma Company Has a Piece of Equipment with an Original

Essay

Sigma Company has a piece of equipment with an original cost of $1,440,000. The equipment's carrying value at the beginning of this year (net of accumulated depreciation)was $1,080,000. Sigma recorded $120,000 for depreciation for this year. The equipment's fair value at the end of the year was $1,056,000. This is the first year that the company has revalued this equipment.
Required:
a. Record the journal entry for the revaluation adjustment assuming that Sigma uses the elimination method.
b. Record the journal entry for the revaluation adjustment assuming that Sigma uses the proportional method.