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Hi ! I’m planning to sit for FR this June session and while doing the question practice on kaplan’s exam kit, i got stuck on one of the question below. If possible, can any one pls help me here?
Question: The following trial balance extract relates to a property which is owned by Veeton as at 1 April 20X4.
Property costs $12m Dr (20 years original life), Accumulated depreciation as at 1 April 20X4 $ 3.6m Cr.
On 1 October 20X4, following a sustained increase in property prices, Veeton revalued its property to $10.8m
What will be the depreciation charge in Veeton’s SOPL for the year ended 31 March 20X5?Hi,
What is it exactly that you are finding difficult with the question above? If you let me know then I’ll gladly help but I don not just answer a full question for you without you having made an attempt at solving it yourself first.
As a clue, it looks like we have revalued the property part way through the year, so the depreciation will consist of the original depreciation for six months plus the new depreciation for six months based on the revalued amount spread over the remaining useful life.
Thanks
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