Skip to content
ACCA exam results — Are you ready?Chat about it >>

Ask the Tutor ACCA FA

depriciation

TGTushar Gujral5y ago
hey john, i know you dont have kaplan book i am having doubt in section b question its an short one question : You have now been provided with an additional extract from Ice Co’s trial balance as at 31 December 20X1 as follows: $ $ Freehold land and building – cost (Land $70,000) 120,000 Freehold building – accumulated dep’n at 1 Jan 20X1 20,000 Plant and equipment – cost 120,000 Plant and equipment – accumulated dep’n at 1 Jan 20X1 15,000 The freehold building is depreciated on a straight?line basis over its estimated useful life of 50 years. The plant and equipment is depreciated on a reducing balance basis at the rate of 15%. There were no purchases or disposals of non?current assets during the year. Calculate the depreciation charge for the year which was included as an expense within cost of sales. Freehold building $ Plant and equipment $ i got the depriciation for the freehold building but in plant and equipment deprication calculated for per month basis? in answer it has deducted 95000 from 120000 i am not getting how did they get 95000. my doubt is this
John MoffatJohn MoffatTutor5y ago#1
Reducing balance depreciation is not calculated on a per month basis. I have no idea where the 95,000 came from. I can only assume that it is a typing error in either the answer or (more likely) in the question. If the accumulated depreciation was actually $15,000 then the depreciation should have been calculated on 120,000 - 15,000.
Sign in to reply to this topic.