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.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 10E: Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual...

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This question is related with MFRS116.
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