A elearning.act.edu.omMuscat LLC purchased a machine on 1stJanuary, 2019 for OMR 250,000. The rate ofdepreciation is 20% p.a. under straight linemethod. Replacement Cost of the machine on31st December,2019 was OMR 350,000 and on31st December, 2020 was OMR 500,000. Thecompany wishes to follow Current CostAccounting rather than the Historical CostAccounting.a.What is the amount of DepreciationAdjustment?b.What is the amount of AdditionalDepreciation?C.What is the amount of Back LogDepreciation?

Solution: Useful Life of machine = 5 Years (Standard life of machine) Replacement Cost of…

uary,2019 for OMR 25 preciation is 20% p.a. u thod. Replacement Co *December,2019 was *December, 2020 was npany wishes to follow counting rather than th

uary,2019 for OMR 25 preciation is 20% p.a. u thod. Replacement Co December,2019 was December, 2020 was npany wishes to follow counting rather than th

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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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

A elearning.act.edu.om
Muscat LLC purchased a machine on 1st
January, 2019 for OMR 250,000. The rate of
depreciation is 20% p.a. under straight line
method. Replacement Cost of the machine on
31st December,2019 was OMR 350,000 and on
31st December, 2020 was OMR 500,000. The
company wishes to follow Current Cost
Accounting rather than the Historical Cost
Accounting.
a.
What is the amount of Depreciation
Adjustment?
b.
What is the amount of Additional
Depreciation?
C.
What is the amount of Back Log
Depreciation?

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