- This topic has 3 replies, 3 voices, and was last updated 5 months ago by
.
- Posts
3 At 30 September 20X2, the following balances existed in the records of Lambda Co:
Plant and equipment:
Cost $860,000
Accumulated depreciation $397,000
During the year ended 30 September 20X3, plant with a written down value of $37,000 was
sold for $49,000. The plant had originally cost $80,000. Plant purchased during the year cost
$180,000. It is Lambda Co’s policy to charge a full year’s depreciation in the year of acquisition
of an asset and none in the year of sale, using a rate of 10% on the straight line basis.
What was the carrying amount that should appear in Lambda Co’s statement of financial
position at 30 September 20X3 for plant and equipment?There is no point in simply typing out a full question and expecting to be provided with a full answer.
You must have an answer in the same book in which you found the question, so ask about whatever it is in the answer that you are not clear about and I will explain.
I do assume that you have watched my free lectures on this which explain everything needed to be able to answer this question. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
Abdul had a plant and equipment cost balance at the start of the year of $9,450.During the year he purchased equipment for $2,100 and disposed of equipment which had a carrying amount of $1,800. Abdul depreciate plant and equipment on a 20% reducing balance basis with a full year’s charge in the year of acquisition and none in the year of sale.the accumulated depreciation balance at the start of the year was $4,725. What amount should be shown as the carrying amount of plant and equipment as at the year end?
Sir the answer is 4020 and please explain to me
The carrying value at the start of the year was 9450 – 4725 = 4725.
They bought more for 2100 and sold equipment with a carrying value of 1800.
So the carrying value at the end of the year, before charging depreciation for the year, is 4725 + 2100 – 1800 = 5025.
Depreciation for the year is 20% x 5025 = 1005
So the carrying value at the end of the year is 5025 – 1005 = 4020
- You must be logged in to reply to this topic.