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Hi sir,
plz help.
Question: Your line manager has asked you to draft the amount to be shown on the face of the Statement of Financial Position as of at the 31 March 20X5.
The financial statements for the year ended 31 March 20X4 show property, plant and equipment with a cost of $105,695 and accumulated depreciation of $29,320 at year end.
During the current year property, plant and equipment costing $28,650 has been bought, and a piece of equipment costing $14,000 has been reclassified as an asset held for sale. This item had accumulated depreciation of $9,650.
The depreciation charge for the year is $18,995.
Calculate the amount to be shown on the face of the Statement of Financial position for property, plant and equipment.
My issue here is how to treat the depreciation for the asset held for resale..???? the solution adds the depreciation.. as opposed to minus.. why is this? A worked solution would be great. thanks
Just confirm for me, please, that the TNCA figure is 120,345 and accumulated depreciation is 38,665
please is it the answer?
asset held for sale become Current.B/f $105,695 – $29,320
acqui 28 650
held for sale
(net) (4 350)dep ( 18 995)
————————C/f 81 860
Yes Josy that is correct…
This is the solution.
I guess when the asset is removed from NCA.. to a current asset the net amount (cost and depreciation) is moved to CA. I think the way the solution presents it is confusing. By taking the net figure of the Asset for sale and its accumulated depreciation, It makes more sense.
Cost b/f 105,695
Accumulated depreciation b/f(29,320)
Additions 28,650
Asset held for sale – cost (14,000)
Asset held for sale – accumulated depreciation 9,650
Depreciation for the year (18,995)Carrying amount c/f 81,680
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