At 31 December 20X4 Q, a limited liability company, owned a building that it had purchased 10 years ago for $800,000. It was being depreciated at two per cent per year on the straight line basis. On 1 January 20X5 a revaluation to $1,000,000 was recognised. At this date the building had a remaining useful life of 40 years. What is the depreciation charge for the year ended 31 December 20X5 and the revaluation surplus balance as at 1 January 20X5?

At 31 December 20X4 Q, a limited liability company, owned a building that it had purchased 10 years ago for $800,000. It was being depreciated at two per cent per year on the straight line basis. On 1 January 20X5 a revaluation to $1,000,000 was recognised. At this date the building had a remaining useful life of 40 years. What is the depreciation charge for the year ended 31 December 20X5 and the revaluation surplus balance as at 1 January 20X5?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

(A) Rifhan products use straight-line depreciation on all its depreciable assets. The accounts are adjusted and closed at the end of each calendar year. On January 4, 1999, the corporation purchased machinery for cash at a cost of $90,000. Its useful life was estimated to be 10 years with a residual value of $22,000. Depreciation for partial years is recorded to the nearest full month. In 2001, after almost 2 years of experience with the equipment, management decided that the estimated life of the equipment should be revised from 10 years to 7 years. No change was made in the estimate of residual value. The revised estimate of useful life was decided on prior to recording to depreciation for the period ended December 31, 2001. Instructions: Prepare journal entries in chronological order for the above events, beginning with the purchase of the machinery on January 4, 1999. Show separately the depreciation for 1999, 2000, and 2001 and 2002. (B) During the current year, Matrix Homes…
Sun co bought a property for $700 000 including $300 000 relating t land. Building are depreciated at 5% per annum.After 10 year the building were revalued to $500 000. What is the amount to be recognised in the other income in respect of the revaluation?
Select financial information for Logistical Corp. as at December 31, 20X6, follows: Please find the attached image Additional information is as follows: • During the year, Logistical sold equipment for proceeds of $50,000. The equipment had a cost of $80,000 and accumulated depreciation of $35,000.• During the year, a review of Logistical’s goodwill was completed, and it was determined that the asset was impaired and should be written down by $3,000.• Logistical did not purchase any additional investments in the year. Any changes in the fair value of investments have been adjusted through other comprehensive income. These securities are not cash equivalents.• During the year, a new lease was signed for equipment that had a fair market value of $45,000. Depreciation expense for the year totalled $1,000. The new lease was signed in the year, which required a $7,000 payment at the start of the lease.• Logistical elects to classify any interest paid and dividends paid as financing…
Rahara Ltd purchased a piece of equipment for £600,000 on the 1st January 2021. The equipment is expected to have an economic life of 5 years and will have no residual value. Depreciation is calculated on a straight-line basis over the life of the asset. The company received a government of £200,000 towards the purchase of the equipment. The financial year end of the company is December 31st each year. Required: Show the relevant extracts from the financial statements for the years ended 31/12/21 & 31/12/22 under each of the two allowable methods of presentation.
kylark Enterprises Ltd ('Skylark Enterprises), a manufacturing firm, has a fiscal yearend of 31 December. The company utilises the straight-line method of depreciation and has adopted a residual value of 10% for all its assets. The estimated useful life for their machinery is 10 years. The following transactions occurred during the 2023 year: 1. 2 January 2023: Skylark Enterprises purchased machinery worth R500 000. This cost does not include installation and transportation costs, which amounted to R20 000. The machine was ready for use as of 2 January 2023. 2. 1 July 2023: Skylark Enterprises sold one of its old machines that had been purchased on 1 January 2018. The machine had a cost of R 180 000, and it was sold for R60 000. The company recorded a loss on the disposal. The cash payment was received on the same day. 3. 1 November 2023: Skylark Enterprises purchased another machine for R400 000. However, it was only available for use from 1 December 2023. The company's ledger showed…
On Oct 1, 20X1, ABC Company acquired an equipment for P102,000. Estimated residual value is P2,000 with an estimated life of 4 years. ABC uses the sum-of-years' digit method. How much is the accumulated depreciation at Dec 31, 20X3?
The company adopted the straight-line depreciation method. Record the 15% depreciation on the plant and equipment purchased On 1 December 2020 for R125 000.
s
Question oneAbani Limited acquired a machinery on 1/1/2020 for K200,000. The company depreciates the machinery at 25% per annum on cost. The company`s tax rate is 35% and that the year end is 31/12.The company is entitled to the following capital allowances:Year K2020 100,0002021 100 0002022 02023 0The company also had the following profits before tax but after depreciation as follows:Year K2020 125,0002021 140,0002022 175.0002023 192,000You are required to prepare the profit and Loss account extracts for all the yearsa) Ignore Deferred tax b) Include deferred tax c) Statement of Financial position (extracts) for the years 2020 to 2023
Use this information to answer the following 12 questions: Jefferson Company acquired equipment on January 2, Year 1, at a cost of $10 million. The equipment has a five-year life, no residual value, and is depreciated on a straight-line basis. On January 2, Year 3, Jefferson Company determines the fair value of the asset (net of any accumulated depreciation) to be $12 million. Determine the impact the equipment has on Jefferson Company's income in Year 1 using IFRS, assuming the revaluation method is used for measurement subsequent to initial recognition.
During the year ended 30 June 2023, CoCo Berhad had the following transactions: a. In July 2022, CoCo Berhad acquired a building for RM800, 000 with an estimated useful life of 20 years. It is the company's policy to depreciate the building on a straight line basis. On 30 June 2023, the building had been revalued to RM950, 000. It is the company's policy to provide a full year's depreciation in the year of purchase and none in the year of disposal. For tax purposes, initial allowance of 10% and annual allowance of 3% are given for such buildings. The company has no intention to dispose the revalued building. b. CoCo Berhad had trade receivables of RM1, 500, 000 and an allowance for doubtful debts of 10% has been made for the year. Income tax rate is 25% for the year ended 30 June 2023. Required: Calculate the deferred tax asset or deferred tax liabilities as at 30 June 2023 arising from the above transactions. Please step by step answer
On January 1, year 1 ABC. Ltd. had a piece of equipment with a cost of $ 150000 and accumulated depreciation of $ 60000. The company uses the straight line method. The equipment has a useful life of 10 years and a residual value of $ 30000. The equipment was sold on July 1, year 1 for $ 150000. Calculate the gain or loss on disposal. If the amount is a gain, enter the answer as a positive amount below (i.e. 20000). If the amount is a loss, enter the answer as negative amount below (i.e. -20000). Round your final answer to the nearest dollar.