ACCA FR Chapter 5 IAS16 Questions
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Question 4 should be rewritten because it’s confusing
I agree. There’s nothing in the question that indicates Triage Co hasn’t already correctly accounted for the depreciation on the new equipment, the student is just supposed to guess that fact.
ohk
Have the same question as StefanosG
StefanosG says
January 22, 2021 at 4:55 pm
Why do we depreciate on 9 years estimated life while only 6 months have past since the purchase. Shouldn’t it be 9.5 years ?
Thanks
Thanks in advance for this benefitable form for ACCA exams. I would like that know when FR (F7) practise test was uploud in site? And, are relevance this questions for December, 2020 session?
Question 3,why isnt depreciation accounted for from January 20×3 to June 20×3?Why doies the depreciation start in July 20×3?Shpukd we be depreciating the machine from the time it was purchased?
Jan 20X3 – Jun 20X3 is in the year ending on 30 Jun 20X3. We’re asked about depreciation for year ending 30 Jun 20X4, therefore for period 1 July 20X3 – 30 Jun 20X4
Hi Sir,
The new machine bought on 30 september 20×5, the depreciatio start from Sep 20×5 to 31 mar 20×6, which is 7 month in total.
But why the deprecation only counted for half year instead of 7 month?
no geo, depreciation starts only from October 1 20×5 and that makes it to half year.
if the same was purchased on 1 of September instead of 30 sept. then your argument is correct. thats how it works.
Hello Sir,
First question is about having a legal obligation. Why is the answer to providing for the expense each year is incorrect?
Best,
Jakob
Because costs for major overhaul should be capitalized to PPE carrying value, and then depreciated over useful life. Think of it like a revaluation.
This cost is directly attributable to PPE, so it shouldn’t be just expensed.
I think no 4 answer is wrong
The correct is
(72100-10000) =62100
(28100-750)= 27350
62100-27350= 34750
34750*.15= 5212.5
(10000*.15)/6= 750
The depreciation is 5212.5+750= 5962.5
That $750 shown in the second line of your post presumably relates to the half year 15% on the new $10,000 purchase
HOWEVER, that accumulated depreciation figure of $28,100 is shown in the trial balance BEFORE the year’s depreciation charge is accounted for
So that $750 is NOT already included within the $28,100
The calculation is therefore $10,000 @ 15% for half a year = $750
and 15% of ($62,100 – $28,100) is 15% x $34,000 = $5,100
So the depreciation charge for the year is $750 + $5,100 = $5,850
OK?
thats what i thought at first but only to realise the depreciation of 750 wasnt included in the acc depreciation figure.
first depreciation from july to december i think it is not relevant to the question.
Hello Teacher,
Would like to ask you, why on the Zeus Co exercise the depreciation starts on 30 June to dezember not january to december when the machine was bought?
Thank you.
The financial year end is June so the period that we are looking at is 1 July X3 to 30 June X4
6 months depreciation from 1 July X3 to 31 December X3 is 1/2 * 10% * $160,000 AND
6 months depreciation from 1 January X4 to 30 June X4 is 1/2 * 1/9 * $ 162,000 (1/9 because the revaluation from $144,000 to $162,000 on 1 January X4 did NOT change the estimated useful life)
OK?
Okay sir, thank you so much sir
Why do we depreciate on 9 years estimated life while only 6 months have past since the purchase. Shouldn’t it be 9.5 years ?
Sir
I think the date should be on 1 July 20X3 at the question, not 1 Jan 20×3, but he told the purchasing has been made on Jan 20X3,