On the 31" December 2010, SXB Limited had the following shown in its financial year- end Statement of Financial Position: Buildings: Frw 5,000,000 1,000,000 4,000,000 Cost Accumulated depreciation Carrying amount Depreciation on buildings has been charged at the rate of 4% per annum, and so far, no revaluation exercise was done since its acquisition till June 30, 2011 when it was revalued to Frw5,925,000 on the remaining estimated useful life. Required: Show the extracts from the financial statements for the year ended December 31, 2011
On the 31" December 2010, SXB Limited had the following shown in its financial year- end Statement of Financial Position: Buildings: Frw 5,000,000 1,000,000 4,000,000 Cost Accumulated depreciation Carrying amount Depreciation on buildings has been charged at the rate of 4% per annum, and so far, no revaluation exercise was done since its acquisition till June 30, 2011 when it was revalued to Frw5,925,000 on the remaining estimated useful life. Required: Show the extracts from the financial statements for the year ended December 31, 2011
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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:On the 31s December 2010, SXB Limited had the following shown in its financial year-
end Statement of Financial Position:
Buildings:
Frw
5,000,000
1,000,000
4,000,000
Cost
Accumulated depreciation
Carrying amount
Depreciation on buildings has been charged at the rate of 4% per annum, and so far, no
revaluation exercise was done since its acquisition till June 30, 2011 when it was revalued to
Frw5,925,000 on the remaining estimated useful life.
Required: Show the extracts from the financial statements for the year ended December 31,
2011
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