Company Alpha has been constructing a new piece of plant over the past 18 months which is due to come into use on 1 August 2015. The following information is available. $ List price of materials 10,000,000 Trade discount given on materials 5% Delivery costs 500,000 Installation costs 2,000,000 Staff training 25,000 Pre production testing 100,000 A loan was taken out to finance the plant and the interest accrued on this loan is $50,000. Management invested the loan proceeds in a deposit account before it was needed which generated interest of $10,000. The asset has a useful life of 5 years and has no residual value. Show the extracts from the statement of comprehensive income for the year ended 31 December 2015 and the statement of financial position at that date. For any items not included in calculating the cost rice of the asset an explanation should be given.
Company Alpha has been constructing a new piece of plant over the past 18 months which is due to come into use on 1 August 2015. The following information is available. $ List price of materials 10,000,000 Trade discount given on materials 5% Delivery costs 500,000 Installation costs 2,000,000 Staff training 25,000 Pre production testing 100,000 A loan was taken out to finance the plant and the interest accrued on this loan is $50,000. Management invested the loan proceeds in a deposit account before it was needed which generated interest of $10,000. The asset has a useful life of 5 years and has no residual value. Show the extracts from the statement of comprehensive income for the year ended 31 December 2015 and the statement of financial position at that date. For any items not included in calculating the cost rice of the asset an explanation should be given.
Chapter11: Long-term Assets
Section: Chapter Questions
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Company Alpha has been constructing a new piece of plant over the past 18 months which is due to come into use on 1 August 2015.
The following information is available.
| $ | |
| List price of materials | 10,000,000 |
| Trade discount given on materials | 5% |
| Delivery costs | 500,000 |
| Installation costs | 2,000,000 |
| Staff training | 25,000 |
| Pre production testing | 100,000 |
A loan was taken out to finance the plant and the interest accrued on this loan is $50,000. Management invested the loan proceeds in a deposit account before it was needed which generated interest of $10,000.
The asset has a useful life of 5 years and has no residual value.
Show the extracts from the statement of comprehensive income for the year ended 31 December 2015 and the
For any items not included in calculating the cost rice of the asset an explanation should be given.
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