At 31 December 2003 Q, a limited liability company, owned a building that had cost $800,000 on 1 January 1994.
It was being depreciated at two per cent per year.

On 31 December 2003 a revaluation to $1,000,000 was recognised. At this date the building had a remaining useful
life of 40 years.

Which of the following pairs of figures correctly reflects the effects of the revaluation?
                   Depreciation charge                          Revaluation reserve
       for year ended 31 December 2004           as at 31 December 2003
$ $
A 25,000 200,000
B 25,000 360,000
C 20,000 200,000
D 20,000 360,000

B
Depreciation 1/40 x 1,000,000
Revaluation 1,000,000 – 640,000