- March 1, 2020 at 4:40 pm
The balances listed below were extracts from the records of Hydan Co. on 31 December 2017: £000
PPE (carrying amount at 31 December 2016) Administrative expenses
Inventory at 1 January, 2017
Research and Development recognised as Intangible Assets Cash in hand
Ordinary shares (£10 each)
Retained earnings at 1 January, 2017
1) Inventory was valued at £2,917,000 at the close of business.
2) Non-current assets- tangible:
Details of the other property, plant and equipment at 31 December 2016 are: £’000
53,065 30,028 37,400
2,871 1,200 3,000
80 2,468 3,492 3,470 10,000 41 482 15,000 16,003
Land at cost
Buildings at cost
Less accumulated depreciation at 31 December 2016 Plant at cost
Less accumulated depreciation at 31 December 2016
On the 30th June, 2017, Hydan Ltd. had an open market basis valuation of its PPE. Land was valued at £21 million; Before revaluation, the buildings are depreciated on a straight line basis with 40 years expected useful life. After revaluation, buildings were valued at£16 million with 20 years of remaining expected useful life. Before revaluation the plants were depreciated on a straight line basis with expected useful life of 20 years. The plants were valued at £2.5 million. After revaluation, plants are depreciated with a reducing balance bases at the rate of 20%. The directors wish these new values to be incorporated into the financial statements.
3) On 1 January 2015, Hydan Ltd. bought a plant for £200,000 (included in the trial balance). It has an expected useful life of 20 years and a nil residual value. On 30 June, 2017, Hyden Ltd. decides to sell the plant and starts actions to locate a buyer. The plant is in short supply, so Hyden Ltd. is confident that the plant will be sold fairly quickly. Its market value at 30 June 2017 is £160,000 and it will cost £5,000 agency cost. The plant has not been sold at the year end.March 4, 2020 at 7:50 pm
I’ll answer your query once you’ve attempted it yourself. The best way to learn is to attempt the question first and learn from your mistakes.
Once you’ve shown your double entries then I’ll happily answer it for you.
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