A building was purchased on 1 January 20X1 for $300,000 and had a useful economic life of 40 years. On 1 January 20X5 the building was revalued by a professional surveyor at $450,000. Directors decided to incorporate the revalued amount into the financial statements.

A building was purchased on 1 January 20X1 for $300,000 and had a useful economic life of 40 years. On 1 January 20X5 the building was revalued by a professional surveyor at $450,000. Directors decided to incorporate the revalued amount into the financial statements.

The accounting entries to record the initial revaluation of the building in the financial statements for the year ended 31 December 20X5 will be to debit building cost $150,000 and then:
A . credit accumulated depreciation $37,500 and credit revaluation reserve $112,500.
B . credit accumulated depreciation $30,000 and credit revaluation reserve $120,000.
C . debit accumulated depreciation $30,000 and credit revaluation reserve $180,000.
D . debit accumulated depreciation $37,500 and credit revaluation reserve $187,500.

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Answer: C