Where an asset is to be revalued, the following information is relevant:
This is the end of the asset's seventh year
Original cost $800,00
Depreciation for 7 years at 10% straight line $ 560,000
Asset to be revalued by $600,000
Estimated remaining useful life revised to 5 years.
What figure shall be debited to the asset Account and what will the nxt year depreciation charge be?
answer depreciation $168000
can anyone explaining this to me?
why not 600,000/5=120,000
Ask the Tutor ACCA FR
revalued asset depreciation calculation
10y ago#1It's being revalued BY $600,000 not revalued TO $600,000
(and the amount debited to the asset account should be $40,000)
OK?
ok, so ie increment book value of 40,000, thus cost 800,000+40000=840,000
divide by revised 5 yr = 168000, my logic on right track right? thanks Prof Mike
10y ago#3Yes, that's correct (and just "Mike" is sufficient, thanks :-) )
Sign into reply to this topic.