Please answer ALL questions. (Total 60 marks)Question 1On 1 October 20X5 Dearing acquired a machine under the following terms: $000 Manufacturer’s base price 1,050 Trade discount (applying to base...

Please answer ALL questions. (Total 60 marks)
Question 1
On 1 October 20X5 Dearing acquired a machine under the following terms:

$000

Manufacturer’s base price 1,050

Trade discount (applying to base price only) 20%

Freight charges 30

Electrical installation cost 28

Staff training in use of machine 40

Pre-production testing 22

Purchase of a three-year maintenance contract 60

Estimated residual value 20
On the same date Dearing purchased an excavator for $1,260,000 with an estimated residual value of

$60,000; details relating to the excavator are as follows:

Hours

Estimated life in machine hours 6,000

Hours used – year ended 30 September 20X6 1,200

– year ended 30 September 20X7 1,800

– year ended 30 September 20X8 850

Dearing held a property that at 1 October 20X5 had a carrying amount of $2,620,000 and a remaining

useful life of 40 years. At 30 September 20X6 the property was revalued to $2,800,000. This property

had previously suffered a fall in value of $125,000 which had been expensed to profit or loss.
Required:
DISCUSS the accounting treatments for the above non-current assets in accordance to IAS 16

Property, plant and equipment.
a) Cost capitalisation of machine as at 1 October 20X5. (10 marks)
b) Carrying amount and Depreciation charged of excavator for the year ended 30 September

(10 marks)
c) Revaluation surplus, Depreciation charged and Carrying amount of property as at 30

September 20X6.
Nov 09, 2022
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