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On 1 January 20×9 new premises were acquired at a cost of $750000. Also on 1 January 20×9 additional associate costs incurred were as follows:
Legal costs of purchase $7500
Architect’s fees $9200
Annual maintenance contract $6000
Alterations to property $25000The premises is to be depreciated over its useful life of 20 yrs. The company prepares f/s at 31 Dec each year.
What is the carrying amount of the premises in financial position as at 31 Dec 20×8?My answer is $728365. Am I wrong?
I think the alterations to the property amount shouldn’t be added to the cost.The alterations should be capitalised and so the initial cost is $791,700.
I think you have copied the dates wrongly because at 31 Dec 20X8 the carrying amounts zero since they did not then own the property!!
I ask again, why are. you attempting questions for which you do not have an answer? You should be using a Revision Kit from one of the ACCA Approved Publishers.
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