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?
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Depreciation Question
3y ago#1There is no point in simply typing out a full question and expecting to be provided with a full answer.
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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
1y ago#3The 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
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