MCQ--Asset

1) I would go for $310,000 2) Can you check your figures again, please (or give me the reference where I can find the question?) My answer does not appear in the list of options available!

My sincere apologise. Typing error on question 2 on 2paragraph. On 1 Jan 2013 (should be 1Jan 2012), the building was revalued to its fair value of $644,000, with no change to its remaining useful life. Thank you

For second question option A $212,000 OK?

Hi Mike Please explain in details how you obtain these two answers as I totally lose and no idea how to work up. Thank you

I assume that both my answers are correct! "1) Moffat adopted the IAS 16 revaluation model on 31Dec 20X5. On this date the historical cost carrying amount of its property was $120,000 and its fair value was $460,000. The property had a remaining useful life of 20 years. At 31Dec 20×6 the fair value of the property had fallen to $430,000." 31 December, 2015 revalue by $340,000 to $460,000 and charge depreciation at the rate of $23,000 each year Carrying value at 31 December, 2016 depreciated down from $460,000 by $23,000 to $437,000 so now need to impair by $7,000 (Dr Revaluation Reserve, Cr TNCA) so Revaluation Reserve falls down from $340,000 by $7,000 to $333,000 And don't now ask where I got $310,000 from! I can't see how I got there! And I can't see $333,000 as an option in the 4 possibles What does the suggested solution say? "2) On 1 Jan 2010, Stirling purchased a building for $500,000, charging depreciation straight line over 25 years. On 1 Jan 2012, the building was revalued to its fair value of $644,000, with no change to its remaining useful life. On 1 Jan 14, the building was sold for $800,000. What is the profit on disposal, to the nearest $’000, to be recorded in Stirling’s statement of profit or loss for the year ended 31 Dec 2014, according to IAS 16 Property, Plant & Equipment?" Bought 1 January, 2010 for $500,000, 25 year life, $20,000 depreciation each year Depreciate 2 years to 31 December, 2011 brings carrying value down from $500,000 by $40,000 to $460,000 Revalue on 1 January, 2012 from $460,000 by $184,000 to $644,000, depreciate at $644,000, / 23 years' remaining useful life (because it started with a 25 year life and it's now 2 years old) so $28,000 each year Depreciate 2 years to 31 December, 2013 brings carrying value down from $644,000 by $56,000 to $588,000 Sell for $800,000 gives a profit on disposal of $800,000 less $588,000 = $212,000 What does the suggested solution say?