Additional Information: 1. Closing inventory on 31 December 2020 was RM150,000. 2. Second half interest on debenture is not recorded yet. cost which had carrying amount of 3. One of the plants and machinery RM100,000 was impaired. The fair vahe total sell was RM83,000 and value in use of the machinery was RM85,000. (Useful life of the plant and machinery is 25 years. Depreciation applied on straight line method. 4. Payment to one of the trade payables amounted RM10,000 in 2019 was wrongly recorded as advertising expenses. 5. Current tax is calculated RM32,000. You are required prepare: a) Statement of Comprehensive Income for the year ended 31 December 2020. b) Statement of Changes in Equity for the year ended 31 December 2020. c) Statement of Financial Position as at 31 December 2020.
Additional Information: 1. Closing inventory on 31 December 2020 was RM150,000. 2. Second half interest on debenture is not recorded yet. cost which had carrying amount of 3. One of the plants and machinery RM100,000 was impaired. The fair vahe total sell was RM83,000 and value in use of the machinery was RM85,000. (Useful life of the plant and machinery is 25 years. Depreciation applied on straight line method. 4. Payment to one of the trade payables amounted RM10,000 in 2019 was wrongly recorded as advertising expenses. 5. Current tax is calculated RM32,000. You are required prepare: a) Statement of Comprehensive Income for the year ended 31 December 2020. b) Statement of Changes in Equity for the year ended 31 December 2020. c) Statement of Financial Position as at 31 December 2020.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 54CE
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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