Practice : PPE - Becker revision queston bank 19

Workings ($'000)

1) Initial recognitionBase price 1,050 Less trade discount (210)

840 Freight charges 30 Electrical installation 28 Pre production testing 22 Costs 920

2) Dpreciation per hour = (920 - 20) / 6,000 hours 0.15

Depreciation for year 2010 (1,200 hours x 0.15) = 180 Depreciation for year 2011 (1,800 hours x 0.15) = 270

3) Depreciation per hour for year 2012Carrying amount at 1 Oct 2011 (920 - 180 - 270) 470 Upgrade capitalised 200

670 Revised residual value (40)Revised depreciable amount 630 Remaining useful life 4,500 hours Depreciation per hour 0.14

Depreciation for year 2012 (850 hours x 0.14) 119

4) Maintenance cost $60,000 is to be amortised over 3 years

Initial cost 60 Allocated to year 2010 (20)Carrying amount - 2010 40 Allocated to year 2011 (20)Carrying amount - 2011 20 Allocated to year 2012 (20)Carrying amount - 2012 -

Answer

Statement of profit or loss for the year ended 30 September2010 2011 2012

$'000 $'000 $'000 Discount income (5% x 840) 42 - -

Staff training 40 - - Depreciation (w2), (w3) 180 270 119 Maintenance (w4) 20 20 20

Statement of financial position as at 30 September2010 2011 2012

$'000 $'000 $'000 Property plant and equipment Costs 920 920 1,120 Accumulated depreciation (180) (450) (569) Carrying amount 740 470 551

Prepayment Maintenance (w4) 40 20 -