Bold ltd purchased mactinery on 1 lanuary 2021 at a cast of R1200000 A major inspection has to be carned out on themachinery every three years. The last inspectian perkumed on the mactine was on 31 December 2000 by the selli andthe inspection costs were included in the purchase price. On the acquisinich date, fhe present value of future expectedinspection costs to be incurred was estimatiod at an amount of R240 000. Dn the wequation date the estimatod usefullife of 10 years was alocated to the machime. The inspection component is part of the mactine and not a separate arset.The carrying amount of the machinery (including the inspection component) for the year ended 31 Decembe 2021 is: RI124000 A1 000000 R1 056000 P1 024000n

Here's a breakdown of the information and the calculation:Original Cost: R1,200,000 (includes…

Answered: Bold ltd purchased mactinery 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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st On 1 January 2019, a machine was bought by ABC Company at a cost of OMR 70,000. The machine has a useful life of 5 years and a salvage value OMR 2,000. How much is the book value at the end of the year 2019 using straight line method? a. OMR 13,600 b. OMR 50,000 c. OMR 56,400 d. OMR 68,000
A vehicle which cost R100 000 and on which the accumulated depreciation is R60 000 on 31 December 2020 (Year-end) is sold on the 31 March 2021 for R45 000 to Mr Hamilton. It was agreed that he would pay 50% in cash and the balance on the 30 June 2021. Depreciation is written off at 20% per annum using the diminishing balance method. The entity is not registered for VAT. Required: Prepare all the journal entries to record the disposal of the vehicle on 31 March 2021. Journal narrations are required. Document numbers are not required.
The initial cost of an evaporative crystallizer including its installation is P930,000. The approve life of the equipment is 13 years for depreciation. The estimated salvage value of the equipment is P66,000 and the cost of dismantling is P22,000. Using DBM method, what is the annual depreciation charge and what is the book value of the machine at the end of the eight year.
vardhaman traders purchased a machinery on 4.4.2019 at a price of rs 250000 and paid rs50000 on the carriage of the machinery to bring it to the factory premises. the management decides that charging depreciation as per the wdv method will make more sense. it was decided that – the depreciation would be charged @15% on wdv method the useful life of the machinery is 5 years the machinery has been disposed off at the completion of 3 years at a value of rs200000 required-  discuss the concept of charging depreciation through wdv method. calculate the closing wdv and depreciation for all the first three years. calculate the profit and loss, if any on the disposal of the asset  is this possible for any business entity to change the method of charging depreciation
During the year LM ltd acquired an iron ore mine at a cost of GHS6m. In addition, when all the ore has been extracted (estimated ten years' time) the company will face estimated costs for landscaping the area affected by the mining that have a present value of GHS2m. These costs will still be incurred even if no further ore is extracted. How should this GHS2m future cost be recognised in the financial statements? A. Provision GHS2m and GHS2m capitalised as part of cost of mine B. Provision GHS2m and GHS2m charged to operating costs C. Accrual GHS200,000 per annum for next ten years D. Should not be recognised as no cost has yet arisen
d. Polycarp Ltd adopts revaluation model for subsequent measurement of its intangible assets in accordance with IAS 38: Intangible assets. The policy of Polycarp is to revalue its intangible asset at the end of each year. An intangible asset with an estimated useful life of 9 years was acquired on 1 January 2018 for GH¢45,000. It was revalued to GH¢54,400 on 31 December 2018 and the revaluation surplus was correctly recognized on that date. As at 31 December 2019, the asset was revalued at GH¢32,000. Required: Discuss the accounting treatment required in 2018 and 2019 financial statements.
The Equipment owned at the beginning of 2022 had been purchased as follows: Acquisition Acquisition year cost 2018 2019 2020 100 000 kr 55 000 kr 69 000 kr During the current year, the purchase of Equipment has been made with SEK 205,000 The estimated useful life (economic life) of all machines and equipment is 10 years. The company is entitled to accounting depreciation. Calculate and post the depreciation for the year according to plan.
Asset ImpairmentGreen Light Ltd (GLL) tested a machine for impairment on 31 December 2018. The machine was carried at depreciated historical cost, and its carrying amount was $150,000. It had an estimated remaining useful life of 10 years. GLL's accounting policy required all property, plant and equipment's recoverable amount was determined on the basis of value-in-use calculation, using a discount rate of 15%. The management of GLL estimated the future net cash flows of the machine using reasonable assumptions. The following information related to future net cash flows of the machine was available at the end of 2018. Year Future net cash flow ('000)2019 22,1652020 21,4502021 20,5502022 24,7252023 25,3252024 24,8252025 24,1232026 25,5332027 24,2342028 22,850 Suppose in the years 2019-2021, no event occurred that required the machine's recoverable amount to be re-estimated. On 31 December 2022, costs of $25,000 were incurred to enhance the machine's performance. Revised estimated…
Assume that Sohar traders purchased a Truck for OMR 15000 on 31st December 2015. The expected salvage value after its five years useful life is OMR 1000. Calculate the amount of depreciation to be charged on truck for the year 2020 by following Diminishing-Balance Method. a. OMR 444 b. None of the given options c. OMR 777.6 d. OMR1296
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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