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Depreciation of PPE

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Depreciation of PPE

  • This topic has 8 replies, 2 voices, and was last updated 6 years ago by P2-D2.
Viewing 9 posts - 1 through 9 (of 9 total)
  • Author
    Posts
  • March 21, 2019 at 1:36 pm #509945
    lusan
    Participant
    • Topics: 32
    • Replies: 17
    • ☆

    The following information has been extracted from Triage Co’s Trial Balance:

    P&E Cost $72,100 $44,000
    P&E, Accumulated Dep $28,100 $27,350 $6,600

    Included within the cost is an item of equipment that was purchased for $10,000 on 30 September 20X5

    Traige’s notes to financial statements reveal that depreciation is charged at 15% per annum on a reducing balance basis, time apportioned in the years of acquisition and disposal

    In accordance with IAS 16 PPE, what is the dep charged to traige co’s statement of PL in respect of the P&E for the year ended 31 Mar 20X6

    Soln:

    Plant: 72100-10000=$62100
    Dep of Equip=10000*6/12*15%=$750
    Acc Dep of Plant only=28100-750=$27350
    So Op bal of Plant=62100-27350=$34750
    Dep Of Plant=34750*15%=5212.5
    Total Dep=750+5212.5=$5962.50

    solution in open tuition is total dep $5850
    which one is correct?

    March 21, 2019 at 10:01 pm #510008
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7171
    • ☆☆☆☆☆

    Hi,

    Where is the question from originally, please? And also where have you found the solution on our website?

    Thanks

    March 22, 2019 at 5:39 am #510026
    lusan
    Participant
    • Topics: 32
    • Replies: 17
    • ☆

    Its the question from open tuition, Online practice question that open tuition facilitates for every chapter.

    March 22, 2019 at 5:43 am #510027
    lusan
    Participant
    • Topics: 32
    • Replies: 17
    • ☆

    https://opentuition.com/acca/fr/acca-fr-chapter-5-ias16-questions/
    here is the link

    March 23, 2019 at 7:21 am #510115
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7171
    • ☆☆☆☆☆

    Hi,

    The answer is the 5,850 that is given in the solutions to the question. I have no idea where you have found the solution that gives 5,962.50 as that is incorrect.

    Thanks

    March 23, 2019 at 9:20 am #510130
    lusan
    Participant
    • Topics: 32
    • Replies: 17
    • ☆

    I have made calculation depending on my understanding. So, Please can you explain how can it be answer $5850 ?

    March 24, 2019 at 8:26 pm #510311
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7171
    • ☆☆☆☆☆

    Have you looked at the answer provided? It shows how to get the answer of $5,850.

    March 25, 2019 at 9:39 am #510362
    lusan
    Participant
    • Topics: 32
    • Replies: 17
    • ☆

    Yes, I have looked. That is why I’m asking you where is the mistake in my calculation or in the calculation made by open tuition.

    March 25, 2019 at 10:08 pm #510430
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7171
    • ☆☆☆☆☆

    There is no mistake in the calculation provided by, so you need to compare what you’ve done to the solution given and work out what you’ve done differently. Once you’v done this then you can specifically ask about a particular part that you do not understand.

    Thanks

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