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Tibet acquired a new officce building on 1 October 20×4 . The initial carrying amount of the Air conditioning was $4 million with an estimated live of 10 years.
When the Air conditioning system is due for replacement, it is estimated that the old system will be dismantled and sold for $500,000. Depreciation is time apportioned where appropriate.
At what amount will the Air conditioning be shown in Tibet’s statement of financial position as at 31 March 20×5?
My working 4000 – 500/10 yrs * 6/12 = 175
3,500,000 – 175, 000 = $3,325,000.
but Kaplan used 4,000,000 – 175,000 = $3,825,000.
Is this correct?
Carrying value is cost less accumulated depreciation, so it is correct.