On 1 January 20X5 a company purchased some plant. The invoice showed $ Cost of plant 48,000 Delivery to factory 300 One year warranty covering breakdown during 20X5 1000 Modifications to the factory building costing $2,200 were necessary to enable the plant to be installed. it has depreciated on the straight line basis at 10% per year, with a proportionate charge in the years of acquisition and disposal what is the figure for carrying amount of plant in the company statement of financial position as at 31 October 20X5
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.
On 1 January 20X5 a company purchased some plant.
The invoice showed
$
Cost of plant 48,000
Delivery to factory 300
One year warranty covering breakdown during 20X5 1000
Modifications to the
it has
what is the figure for carrying amount of plant in the company
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
