Depreciation

This topic has 3 replies, 3 voices, and was last updated 6 years ago by vumodi.

Viewing 4 posts - 1 through 4 (of 4 total)

Author

Posts
September 30, 2019 at 9:01 am #547664
vumodi
Member
- Topics: 8
- Replies: 6
MC Question 13 – June 2015
The following trial balance extract relates to a property which is owned by Veeton as at 1 April 2014:

Dr Cr
$’000 $’000
Property at cost (20 year original life) 12,000
Accumulated depreciation as at 1 April 2014 3,600
On 1 October 2014, following a sustained increase in property prices, Veeton revalued its property to $10·8 million.

What will be the depreciation charge in Veeton’s statement of profit or loss for the year ended 31 March 2015?

A $540,000
B $570,000
C $700,000
D $800,000
I dont understand how they got a useful life for the revalued amount
October 2, 2019 at 11:42 pm #547990
has101ggc
Member
- Topics: 2
- Replies: 3
I think like this

3,600/12,000 x 20 = 6 years at start of yeae
October 3, 2019 at 6:06 pm #548044
P2-D2
Keymaster
- Topics: 4
- Replies: 7235
Correct. The annual depreciation was 12,000 over 20 year, and if a total of 3,600 has been charged then six years must have elapsed and there are 14 years left.

Thanks
October 7, 2019 at 4:21 pm #548305
vumodi
Member
- Topics: 8
- Replies: 6
Thank you.
Author

Posts

Viewing 4 posts - 1 through 4 (of 4 total)

You must be logged in to reply to this topic.