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Hi Mike
Question extract from LSBF revision kit. Answer was $184,000 but your reply to a student on June 6, 2016 – MCQ–Asset was $212,000. Please help which answer is correct as I was confused.
Here is the question:
On 1 January 2010, Stirling purchased a building for $500,000, charging depreciation straight line over 25 years.On 1 January 2012, the building was revalued to its fair value of $644,000 with no charge to its remaining useful life.
On 1 January 2014, 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 December 2014, according to IAS 16 Property, Plant and Equipment?
Thank you
Hi, the answer from the information that you have given to me is $212,000
The difference from the apparent answer that I previously gave is $28,000 which happens to be one year’s depreciation of the $644,000 over 23 years
I can only imagine that the dates given to me previously were incorrect … or I made a mistake!
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