2012年ACCA考试《F7财务报告》讲义辅导(8)
Calculate the amount at which the initial cost of the plant should be measured. (Ignore discounting). Solution:The initial measurement of the cost at which the plant would be capitalized is calculated as follows:
$ $
Basic list price of plant 240000
Less trade discount (240000 x 12.5%) (30000)
210000
Shipping and handling costs 2750
Estimated pre-production testing 12500
Site preparation costs
Electrical cable installation ($14000 - $6000) 8000
Concrete reinforcement 4500
Own labor costs 7500 20000
Dismantling and restoration costs
($15000 + $3000) 18000
Initial cost of plant 263250
Question 3
On 1 October 2001 Dawes purchased a 25-year lease on a new industrial storage building for $4 million. Prior to the current year this property was being amortized over its life. The directors are questioning the necessity for this as a 20-year lease on an almost identical building was sold on 1 October 2006 by the builders for $6 million. With effect from the same date (1 October 2006) the directors wish to value the lease at $6 million and cease depreciating it.
N.B.
The regulatory requirements applicable to Dawes permit revaluation of non-current assets in accordance wit the revaluation model in IAS16 Property, Plant and Equipment.
Required:
Critically comment on the Directors’ views in relation to revaluation and depreciation of the leased property, and show the income statement and balance sheet extracts for the year ended 30 September 2007 assuming:
(a)there is no revaluation of the property;
(b)the property is revalued to $6 million at 1 October 2006
Solution:
Comment omitted
Balance sheet extract Historical cost Revaluation
Non-current assets – PPE $000 $000
Cost 4000 6000
Accumulated dep’n (960) (300)
NBV 3040 5700
Reserves:
Revaluation reserve Nil 2660
Income statement extract
Depreciation 160 300
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