the following trial balance extract related to a property which is owned by the veeton as at 1 april 20X4.
$000 $000
dr cr
property at the cost (20 year original life) 12000
accumulated deprecation as at 1st april 20X4 3600
on 1 st october 20X4 following is sustained increase in property price veeton revalued its property to $10.8m
what will be the deprecation charge in veeton statement of profit or loss for the year ended 31 st march 20X5?
A $540000
B $570000
C$700000
D$800000
sir i have not understand how they have calculate the remaining useful life of 13.5 year. so sir please reply soon
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mcq
7y ago#1Hi,
As the asset cost 12,000 and is depreciated over 20 years then the annual depreciation charge is 600 (12,000 / 20). As the accumulated depreciation is 3,600 at the start of the year then there must have bee 6 years of depreciation charged, leaving 14 out of the 20 years left.
As the revaluation took place 6 months into the current year, there are then 13.5 years left.
Hope that clears it up.
Thanks
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