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77%, thanks to opentuition and practicing difficult questions from BPP in the last few days before exam
Same thing might be ( if I am not wrong ) in q. 13 p.208 – in the answers there’s depreciation of 13,200 which I believe may not be attributed to any item stated in the question, it also lacks basis to calculate the amount of revaluation surplus
Question 13
On 1 October, 2012, the company terminated the production of one of its product lines. From this date, the plant used to manufacture the product has been actively marketed at an advertised price of $4·2 million which is considered realistic. It is included in the trial balance at a cost of $9 million with accumulated depreciation (at 1 April 2012) of $5 million.
On 1 April, 2012, the directors decided that the financial statements would show an improved position if the land and buildings were revalued to market value. At that date, an independent valuer valued the land at $12 million and the buildings at $35 million and these valuations were accepted by the directors. The remaining life of the buildings at that date was 14 years. A transfer to retained earnings for excess depreciation is not made. Ignore deferred tax on the revaluation surplus.
Plant and equipment is depreciated at 20% per annum using the reducing balance method and time apportioned as appropriate.
All depreciation is charged to cost of sales, but none has yet been charged on any non-current asset for the year ended 31 March. 2013