Rose purchased plant for 20 million on 1 may 07 with estimated life of 6 yrs.residual value of 1.4 million .At 1 may 2010 the estimated residual value changed to 2.6 million .The change hasnot been taken to the financial statement of 30 april 2011?
Kindly solve this .
Ask the Tutor ACCA SBR
june 2011
12y ago#1Is it 2.7 depreciation and carrying value of 8 million as at 1 May, 2011?
yes as per the solution but i dont understand y
at 1may 2010 cost 20 -2.6=17.4
As the the 3yrs have passed away .Arent we going to depriciate from remaining 3 yrs.
depriciation.17.4/3=5.8
12y ago#320 depreciated at 3.1 per annum gives a net book value of 10.7
Realisable value changes to 2.6 leaving 8.1 to be depreciated over the remaining 3 years at 2.7 per annum
And 10.7 - 2.7 gives a net book value of 8 at the end of the fourth year
OK?
.Thx u .God bless you
12y ago#5You're welcome
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