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Chapter 7 in OT notes Exam Prep Question Page 35

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Chapter 7 in OT notes Exam Prep Question Page 35

  • This topic has 0 replies, 1 voice, and was last updated 2 months ago by geniuz999.
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  • May 11, 2022 at 10:00 am #655402
    geniuz999
    • Topics: 15
    • Replies: 33
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    Question: Shea Co. acquired an office Building for $25m on 1st January 20×2 with an estimated useful life of 20 years. On 1 July 20×8, the building was deemed impaired as its value in use was estimated to be $14m. At that date, the estimated useful life was revised to 10 years.
    My problem: The Depreciation charge of 6 months after the Impairment in the answer is (500) while the way I have calculated it gives me (700)
    The way I solved the problem:
    Cost 25,000
    Acc. dep. -7,500
    C.V. 17,500
    Dep. (25000/20×6/12) -625
    C.V. 16,875
    Impairment (16,875-14000) -2,875
    C.V. (1.7.08) 14,000
    Dep. (14,000/10×6/12) -700
    C.V. 13,300

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