Choice "D" is correct. The entity has a revaluation loss of $20,000 ($150,000 revalued amount from Year 5 - $130,000 fair value on 12/31/Y6). The revaluation loss will be recorded in Year 6 other comprehensive income and will offset the $30,000 revaluation surplus in accumulated other comprehensive income (AOCI), for a net revaluation surplus of $10,000 reported in AOCI on December 31, Year 6.
Choice "b" is incorrect. The $20,000 revaluation loss will be reported in other comprehensive income because it reverses a portion of the $30,000 revaluation surplus reported in the prior year.
Choice "c" is incorrect. The entity will report a net $10,000 revaluation surplus, not loss, in accumulated other comprehensive income on December 31, Year 6: $10,000 net revaluation surplus$30,000 Year 5 revaluation surplus - $20,000 Year 6 revaluation lossChoice "a" is incorrect. The entity will report a net $10,000 revaluation surplus in accumulated other comprehensive income on December 31, Year 6: $10,000 net revaluation surplus$30,000 Year 5 revaluation surplus - $20,000 Year 6 revaluation loss