On 1 January 2021, Tymba plc has a building with a carrying value of £500,000 which was purchased on 31 December 2010. The company use revaluation model to subsequently measure the building. Depreciation is charged based on straight line method over 50 years. The building were revalued on 30 May 2021 and it had a fair value of £650,000. Tymba plc makes an annual transfer between the revaluation reserves and retained earnings in accordance with best practice. What is the amount of annual transfer on 31 December 2021?
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- Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?Flowers Plc. owns a building that was acquired for £120, 000 on 1st July 2019. The year-end is on 31st December. The estimated useful life of the building is 10 years with an estimated residual value of £ 26, 200. Which will be the total accumulated depreciation for the building on 31st December 2021 using the straight-line method? O a. £28, 140. O b. £18, 760. O c. £23, 450. O d. None of the answers is true.A company which uses the revaluation model for its PPE bought a building on 1 January 2014 for £10m. The building has an estimated useful life of 50 years and nil residual value. On 31 December 2018, the building was revalued at £8.1m and on 31 December 2020 it was revalued for a second time at £7.8m. The company uses the straight-line method of depreciation for all PPE items. There was no change to the remaining useful life after each revaluation. What is the net effect of both revaluations on the statement of comprehensive income? Select one: a. A revaluation loss in the income statement of £2.2m b. A revaluation loss in the income statement of £1m c. A revaluation loss in the income statement of £1.2m d. A revaluation loss in the income statement of 0.84m e. A revaluation loss in the income statement of £4.2m f. A revaluation loss in the income statement of £1.4m
- Co D acquires a plant for £600.000 on 1 Jan 2016. This machinery is depreciated on a straight-line basis over its useful economic life which is estimated to be 15 years. On 1 Jan 2021, the company revalues the machinery to be £480,000 using revaluation model. The plant was sold on 1 Jan 2022 for £470.000. Co D's year end is 31 Dec. Required: A. Clearly show cost, accumulated depreciation and carrying value of the plant as of 1 Jan 2011 before revaluation. Show accounting entries on 1 Jan 2021 when plant is revalued. B-Show accounting entries on disposal of the plant on 1 Jan 2022.You have been recently appointed the junior accountant of Peachy Limited. The following trial balance has been extracted from the records of Peachy Limited as at 31 December 2020. €’000 €'000 Ordinary shares of €1 each 150,000 50,000 50,000 80,000 129,010 Share Premium 5% preference shares 7% loan notes Retained earnings Premises 290,000 87,000 40,000 Motor vehicles at cost Equipment at cost Accumulated depreciation – motor vehicles Accumulated depreciation - Equipment Inventory at 1.1.20 Payables Receivables 17,000 8,000 48,000 12,750 24,400 Bank 11,740 Revenue 327,000 Purchases 188,000 34,000 Wages Administrative expenses Selling & distribution costs 15,320 12,470 70,230 2,600 Directors Salaries Loan note interest paid 823,760 823,760 Additional Information: 1. The company uses the revaluation model for valuing its premises. The premises is included in the trial balance at its fair value as at 31 December 2019. Both motor vehicles and equipment are included in the trial balance at…A company which uses the revaluation model for its PPE bought a building on 1 January 2014 for £100m. The building has an estimated useful life of 50 years and nil residual value. On 31 December 2018, the building was revalued at £81m and on 31 December 2020 it was revalued for a second time at £78m. The company uses the straight-line method of depreciation for all PPE items. There was no change to the remaining useful life after each revaluation. What is the net effect of both revaluations on the statement of comprehensive income? Select one: a. A revaluation loss in the income statement of £10m b. A revaluation loss in the income statement of £14m Oc. A revaluation loss in the income statement of £22m d. A revaluation loss in the income statement of £12m e. A revaluation loss in the income statement of £4.2m f. A revaluation loss in the income statement of £8.4m
- Building A is acquired on 1st January 2012 for RM800,000.00. It was depreciated using straight line method for 20 years. The first two years the company uses the cost model but adopt revaluation model afterwards. Revaluations were conducted every three years. Fair values at the date of revaluation were RM693,000.00 in 2014; RM607,500.00 in 2017 and RM490,000.00 in 2020. Give one example when inventory on hand at the reporting date not measured at cost. Prepare journal entries to record revaluations. Show detailed calculations to support your answer.On 1 November 2019, Mushe Limited acquired a machine for N$ 100 000 formanufacturing purposes. The machine was put into use immediately. Payment of thepurchase price will take place on 15 th October 2020. Depreciation is written off at20% per annum according to the straight-line method. Wear and tear are allowed at10% per annum on the reducing balance method and is weighted on a timeproportional basis. The tax rate is 29%. The company reporting date is 31 December 1 November 2019 N$ 1= USD 1.3031 December 2019 N$ 1 = USD 1.2815 October 2020 N$ 1 = USD 1.05 RequiredShow the journal entries for 2019 and 2020 so as to comply with the requirements ofInternational Financial Reporting Standards (IFRS). Journal narrations are notrequired. (Ignore current tax)Rahara Ltd purchased a piece of equipment for £600,000 on the 1st January 2021. The equipment is expected to have an economic life of 5 years and will have no residual value. Depreciation is calculated on a straight-line basis over the life of the asset. The company received a government of £200,000 towards the purchase of the equipment. The financial year end of the company is December 31st each year. Required: Show the relevant extracts from the financial statements for the years ended 31/12/21 & 31/12/22 under each of the two allowable methods of presentation.
- Alankar Ltd. commenced business on 1st January 2018, when they purchased plant and equipment for 9,00,000. They adopted a policy of charging depreciation at 15% per annum on diminishing balance basis and over the years, their purchases of plants have been as follows01/01/2019 - Rs. 3,50,000 01/01/2022 - Rs. 4,00,000 On 1/1/2022 it was decided to change the method and rate of depreciation to straight line basis. On this date remaining useful life was assessed as 6 years for all the assets purchased before 1/1/2022 with no scrap value and 10 years for the asset purchased on 1/1/2022. Prepare depreciation schedule for 5 years. Books of accounts are closed on 31st December every year.ABC Ltd acquired an item of machinery on 1 July 2021 for a cost of $120 000 When the asset was acquired it was considered that the asset would have a useful life to the entity of five years, after which time it would have no residual value It was considered that the pattern of economic benefits would best be reflected by applying the sum-of-digits method Contrary to expectations, on 1 July 2023 the asset was sold for $80 000 Required 1. What was the profit on disposal on 1 July 2023 and what are the journal entries to record the disposal? (Use sum of digit depreciation method) 2. Prepare Depreciation Schedule for the period.During the year ended 30 June 2023, CoCo Berhad had the following transactions: a. In July 2022, CoCo Berhad acquired a building for RM800, 000 with an estimated useful life of 20 years. It is the company's policy to depreciate the building on a straight line basis. On 30 June 2023, the building had been revalued to RM950, 000. It is the company's policy to provide a full year's depreciation in the year of purchase and none in the year of disposal. For tax purposes, initial allowance of 10% and annual allowance of 3% are given for such buildings. The company has no intention to dispose the revalued building. b. CoCo Berhad had trade receivables of RM1, 500, 000 and an allowance for doubtful debts of 10% has been made for the year. Income tax rate is 25% for the year ended 30 June 2023. Required: Calculate the deferred tax asset or deferred tax liabilities as at 30 June 2023 arising from the above transactions. Please step by step answer