At 1 January 20X0 Casey had property, plant and equipment with a carrying amount of $180,000. In the year ended 31 December 20X0 Casey disposed of assets with a carrying amount of $60,000 for $50,000. Casey revalued a building from $75,000 to $100,000 and charged depreciation for the year of $20,000. At the end of the year, the carrying amount of property, plant and equipment was $250,000. How much will be reported in the statement of cash flows for the year ended 31 December 20X0 under the heading 'cash flows from investing activities'? A $75,000 outflow B $125,000 outflow C $135,000 outflow D$50,000 inflow
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
At 1 January 20X0 Casey had property, plant and equipment with a carrying amount of $180,000. In the year ended 31 December 20X0 Casey disposed of assets with a carrying amount of $60,000 for $50,000. Casey revalued a building from $75,000 to $100,000 and charged
How much will be reported in the statement of cash flows for the year ended 31 December 20X0 under the heading 'cash flows from investing activities'?
A $75,000 outflow
B $125,000 outflow
C $135,000 outflow
D$50,000 inflow
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