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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 3600on 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$800000sir i have not understand how they have calculate the remaining useful life of 13.5 year. so sir please reply soon
Hi,
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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