5.   A company has a building with a carrying value of $500,000 and a fair value of $450,000. What would be the journal entry to record the decrease in value?

Answer: The journal entry would be: Revaluation surplus (equity) - $50,000 Building (asset) - $50,000

Here's the tabulated working calculation for the journal entry to record the decrease in value of the building:

To record the decrease in value of the building, we need to credit the revaluation surplus account for the decrease in value (carrying value of $500,000 less the fair value of $450,000), and debit the building account for the same amount. The journal entry would be:

Credit revaluation surplus (equity) for $50,000

Debit building (asset) for $50,000

Therefore, the journal entry to record the decrease in value of the building would be:

Revaluation surplus (equity) - $50,000

Building (asset) - $50,000