On 1 January 20X8, Wootton Co had a building in its books which cost $500,000 with a
carrying amount of $405,000. On 1 July 20X8, the asset was valued at $600,000 and Wootton
Co wishes to include that valuation in its books. Wootton Co’s accounting policy is to
depreciate buildings at the rate of 2% on a straight?line basis.
What was depreciation charge included in the statement of profit or loss for the year ended
31 December 20X8?
Looked at the answer, and it says that we should assume that useful life is 50 years. Will something like this appear on the exam, or is there a mistake in the question?
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I found out, why is it 50 years
2mo ago#2Yes - 2% a year on a straight line basis is the same as depreciating over 50 years (100% / 2% = 50)
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