Indigo Ltd. decided to sell one of its cutting machines and classified it as held for sale after the criteria were met on March 31, 2015, and these criteria are still met on December 31, 2015. Indigo's year-end is December 31. Click here and take a look at the information about the cutting machine, then complete the following paragraph about the measurement of it. Q₁ Select the correct answers from the drop-down boxes. Immediately before initial classification as held for sale on March 31, 2015, the cutting machine should be remeasured at €3,875 Upon initial classification as held for sale, the cutting machine should be measured at and an impairment loss of co should be recognized. when classified as held for sale. At 3,500 Depreciation on the cutting machine shall cease 4 December 31, 2015 the cutting machine should be remeasured to an amount of 3,600
Indigo Ltd. decided to sell one of its cutting machines and classified it as held for sale after the criteria were met on March 31, 2015, and these criteria are still met on December 31, 2015. Indigo's year-end is December 31. Click here and take a look at the information about the cutting machine, then complete the following paragraph about the measurement of it. Q₁ Select the correct answers from the drop-down boxes. Immediately before initial classification as held for sale on March 31, 2015, the cutting machine should be remeasured at €3,875 Upon initial classification as held for sale, the cutting machine should be measured at and an impairment loss of co should be recognized. when classified as held for sale. At 3,500 Depreciation on the cutting machine shall cease 4 December 31, 2015 the cutting machine should be remeasured to an amount of 3,600
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:please answer this question
Indigo Ltd. decided to sell one of its cutting machines and classified it as held for sale after the criteria
were met on March 31, 2015, and these criteria are still met on December 31, 2015. Indigo's year-end is
December 31. Click here and take a look at the information about the cutting machine, then complete the
following paragraph about the measurement of it.
Q₁
Select the correct answers from the drop-down boxes.
Immediately before initial classification as held for sale on March 31, 2015, the cutting machine should be remeasured
at €3,875
Upon initial classification as held for sale, the cutting machine should be measured at
and an impairment loss of co
should be recognized.
3,500
Depreciation on the cutting machine shall cease
December 31, 2015 the cutting machine should be remeasured to an amount of € 3,600
Show Transcribed Text
Dec-31-14
Depreciation
Indigo Ltd.-Information about the cutting machine:
Mar-31-15
Impairment
Mar-31-15
Depreciation
Dec-31-15
Carrying
amount
€
4,000
(125)
3
3,875
(375)
3,500
(339)
3,161
Fair value Costs to sell Value in use
€
€
200
€
4,500
when classified as held for sale. At
4,100
3,600
700
750
3,500
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