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TANGIBLE NON CURRENT ASSETS

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › TANGIBLE NON CURRENT ASSETS

  • This topic has 3 replies, 2 voices, and was last updated 2 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • January 31, 2023 at 11:30 am #677661
    manasvishahh
    Participant
    • Topics: 3
    • Replies: 1
    • ☆

    Plant and equipment:
    Cost $860,000 Accumulated depreciation $397,000
    During the year ended 30 September 20X3, plant with a written down value of $37,000 was sold for $49,000. The plant had originally cost $80,000. Plant purchased during the year cost $180,000. It is Lambda Co’s policy to charge a full year’s depreciation in the year of acquisition of an asset and none in the year of sale, using a rate of 10% on the straight line basis.
    What was the carrying amount that should appear in Lambda Co’s statement of financial position at 30 September 20X3 for plant and equipment?

    ANSWER IS 510,000

    January 31, 2023 at 4:38 pm #677673
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54687
    • ☆☆☆☆☆

    The b balance on the cost account at 30 September is 860,000 – 80,000 + 180,000 = 960,000

    The balance on the accumulated depreciation account is 397,000 – 43,000 + (10% x 960,000) = 450,000.

    The carrying value is 960,000 – 450,000 = 510,000.

    Have you not watched my free lectures on this? The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.

    February 1, 2023 at 10:59 am #677842
    manasvishahh
    Participant
    • Topics: 3
    • Replies: 1
    • ☆

    How did you get 43000 while calculating accumulated depreciation ?

    February 1, 2023 at 5:33 pm #677861
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54687
    • ☆☆☆☆☆

    It is the accumulate depreciation on the asset sold (the difference between the cost of 80,000 and the written down value of 37,000).

    Again, have you watched my free lectures on this? 🙂

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