The company's policy is to revalue its land at each year end and at 30 September 2017 it was valued at $53 million. Trial balance extracts at 30 September 2018 $'000 Land at cost on 30 September 2017 50,000 Plant and equipment at cost Accumulated depreciation at 30 September 2017 76,600 Plant 24,600 Capitalised development expenditure at 30 September 2017 20,000 Non-current assets - tangible: The land was acquired on the 30 September 2017. On 1 October 2017 an item of plant was disposed of for $2.5 million cash. The proceeds have been treated as sales revenue by the business. The plant is still included in the above trial balance figures at its cost of $8 million and accumulated depreciation of $4 million (to the date of disposal). All plant is depreciated at 20% per annum using the reducing balance method. Depreciation and amortisation of all non-current assets is charged to cost of sales. Non-current assets - intangible: In addition to the capitalised development expenditure (of $20 million), further research and development costs were incurred on a new project which commenced on 1 October 2017. The research stage of the new project lasted until 31 December 2017 and incurred $1.4 million of costs. From that date the project incurred development costs of $800,000 per month. On 1 April 2018 the directors became confident that the project would be successful and yield a profit well in excess of its costs. The project is still in development at 30 September 2018. Capitalised development expenditure is amortised at 20% per annum using the straight-line method. All expensed research and development are charged to cost of sales. The accumulated depreciation on plant and equipment at the end of the period is Select one: O a. $34 200 000 O b. $30 200 000 O c. $24 600 000 O d. $32 700 000

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles

Section: Chapter Questions

Problem 8.12MCE

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The company's policy is to revalue its land at each year end and at 30 September 2017 it was valued at $53 million. Trial balance extracts at 30 September 2018 $'000 Land at cost on 30 September 2017 50,000 Plant and equipment at cost Accumulated depreciation at 30 September 2017 76,600 Plant 24,600 Capitalised development expenditure at 30 September 2017 20,000 Non-current assets - tangible: The land was acquired on the 30 September 2017.

On 1 October 2017 an item of plant was disposed of for $2.5 million cash.

The proceeds have been treated as sales revenue by the business. The plant is still included in the above trial balance figures at its cost of $8 million and accumulated depreciation of $4 million (to the date of disposal). All plant is depreciated at 20% per annum using the reducing balance method. Depreciation and amortisation of all non-current assets is charged to cost of sales. Non-current assets - intangible: In addition to the capitalised development expenditure (of $20 million), further research and development costs were incurred on a new project which commenced on 1 October 2017.
The research stage of the new project lasted until 31 December 2017 and incurred $1.4 million of costs. From that date the project incurred development costs of $800,000 per month. On 1 April 2018 the directors became confident that the project would be successful and yield a profit well in excess of its costs. The project is still in development at 30 September 2018. Capitalised development expenditure is amortised at 20% per annum using the straight-line method. All expensed research and development are charged to cost of sales.
The accumulated depreciation on plant and equipment at the end of the period is Select one: O a. $34 200 000 O b. $30 200 000 O c. $24 600 000 O d. $32 700 000

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