a) Covid Company Limited purchased a machine on 1 April 2020 incurring the following costs: Supplier's list price Trade discount @ 15% on list price Shs '000' 24,000 (3,600) 400 Delivery costs Installation costs 1,200 600 Professional costs 22,600 Additional information: (i) (ii) The useful life of the asset was 10 years with residual value of Shs. 2,600. The company applies revaluation model; on 1 April 2021 the machine was revalued at Shs. 26,000; the residual value changed to Shs. 4,400; there was no change on the economic useful life of the machine i.e. the remaining economic useful life on 1 April 2021 was nine years. Ignore the effect of deferred tax on revaluation; secondly the company does not transfer the revaluation surplus. The financial year of the company ends on 31 March every year. (iii) (iv) Required: Present the financial statement extracts for Covid Company Limited for the year ending 31 March 2021 and 2022.

a) Covid Company Limited purchased a machine on 1 April 2020 incurring the following costs: Supplier's list price Trade discount @ 15% on list price Shs '000' 24,000 (3,600) 400 Delivery costs Installation costs 1,200 600 Professional costs 22,600 Additional information: (i) (ii) The useful life of the asset was 10 years with residual value of Shs. 2,600. The company applies revaluation model; on 1 April 2021 the machine was revalued at Shs. 26,000; the residual value changed to Shs. 4,400; there was no change on the economic useful life of the machine i.e. the remaining economic useful life on 1 April 2021 was nine years. Ignore the effect of deferred tax on revaluation; secondly the company does not transfer the revaluation surplus. The financial year of the company ends on 31 March every year. (iii) (iv) Required: Present the financial statement extracts for Covid Company Limited for the year ending 31 March 2021 and 2022.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section9.A: Depreciation

Problem 5P

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Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

Question

please help me

a) Covid Company Limited purchased a machine on 1 April 2020 incurring the
following costs:
Shs '000'
Supplier's list price
Trade discount @ 15% on list price
Delivery costs
Installation costs
24,000
(3,600)
400
1,200
Professional costs
600
22,600
Additional information:
(i)
(ii)
The useful life of the asset was 10 years with residual value of Shs. 2,600.
The company applies revaluation model; on 1 April 2021 the machine was
revalued at Shs. 26,000; the residual value changed to Shs. 4,400; there
was no change on the economic useful life of the machine i.e. the remaining
economic useful life on 1 April 2021 was nine years.
Ignore the effect of deferred tax on revaluation; secondly the company does
not transfer the revaluation surplus.
(ii)
(iv) The financial year of the company ends on 31 March every year.
Required:
Present the financial statement extracts for Covid Company Limited for
the year ending 31 March 2021 and 2022.

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