Bold Ltd purchased machinery on 1 January 2021 at a cast of R1 200 000. A major inspection has to be carried out onthe machinery every three years. The last inspection performed on the machine was on 31 December 2020 by the selleand the inspection costs were included in the purchase price. On the acquisition date, the present value of futureexpected inspection costs to be incurred was estimated at an amount of R240 000. On the acquisition date theestimated useful life of 10 years was allocated to the machine. The inspection component is part of the machine andnot a separate assetThe carrying amount of the machinery (including the inspection component) for the year ended 31 December20211. R1 124 000O2 R1 000 000O3 R1 056 0004. R1 024 000

Here's the breakdown:Original Cost: R1,200,000 (given)Depreciation Method: Straight-line…

Answered: Bold Ltd purchased machinery on 1…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Lokton plc has a piece of equipment which it bought on 1 January 2014 for £1,000,000. The equipment has been depreciated annually at a rate of 10% on cost (with a zero disposal value assumed at the end of its useful life). At the year-end on 30 December 2020, the fair value of the equipment was £320,000. The value in use of this asset is estimated at £280,000. The current costs to sell the equipment amount to £50,000. What is the impairment loss? Select one: a. £0 b. £80,000 c. £198,297 d. £2,000 e. £20,000 f. £251,441 g. £120,000
Ariel Company purchased a boring machine on January 1, 2020 for P8,100,000. The useful life of the machine is estimated at three years with a residual value of P600,000. During the useful life, the expected units of production from the machine are 10,000 units for 2020, 9,000 units for 2021 and 6,000 units for 2022. What is the depreciation expense for 2021 using the most appropriate depreciation method?
Nicholson Company purchased equipment on January 1, 2018, for €120,000 with an estimated residual value of €30,000 and estimated useful life of 8 years. On January 1, 2020, Nicholson decided the equipment will last 12 years from the date of purchase. The residual value is still estimated at €30,000. Using the straight-line method the new annual depreciation will be? A: 7,500 B: 6,750 C: 10,000 D: 9,000
An asset was acquired on January 1, 2020 for P800,000 and is expected to have a 5-year useful life. The straight-line method was used. On January 1, 2022, the asset was deemed to have a sound value of P720,000. The company uses the elimination method in accounting for any revaluation surplus. The replacement cost of the asset at January 1, 2022 is
Tycoon Corporation acquired a building on January 1, 2016 at a cost of P50,000,000. The building has an estimated life of 10 years and residual value of P5,000,000. The building was revalued on January 1, 2020 and the revaluation revealed replacement cost of P80,000,000, residual value of P2,000,000 and revised total life of 12 years. The revaluation surplus as of December 31, 2020 is: P16.8 million P14.0 million P15.4 million P14.7 million
QUESTION Mayan Ltd acquired a machine on 2 January 2018 that needs a major inspection every 2 years. The cost price of the machine is N$2 000 000 and it is estimated that the cost of a major inspection will be N$200 000. The useful life of the machine is estimated to be 8 years and the company has a 31 December year end. REQUIRED TO; Show the carrying amount of the machine as at 31 December 2018 and 2019.
David Ltd commences operations on 1 July 2020 On the same date, it purchases a machine at a cost of $1000 000 The machine is expected to have a useful life of 4 years, with benefits being uniform throughout its life. It will have no residual value at the end of 4 years Hence, for accounting purposes the depreciation expense would be $250 000 per year For taxation purposes, the ATO allows the company to depreciate the asset over three years—that is, $200 000 per year The profit before tax of the company for each of the next four years (years ending 30 June) is $600 000, $700 000, $800 000 and $900 000 respectively The tax rate is 30 per cent. Required: 1. Calculate the taxable profit on 30 June 2021, 30 June 2022, 30 June 2023.2. Record the necessary journal entries.
s
Show your computation In early 2020, Cattle Inc. acquired production machinery at a cost of £400,000 with no residual value. The company applies straight-line method. At the end of 2023, when accumulated depreciation was £160,000, Cattle reported an impairment loss of £80,000, One year later, the fair value less selling costs of the machinery is £210,000 and its value in use is £208,000. Instructions Prepare journal entry related to loss on impairment in 2023 and recovery of impairment loss in 2024 if the company applies revaluation model (proportional method).

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