- 10 Marks
PSAF – Nov 2020 – L2 – Q5a – Accounting for Government Assets and Liabilities
Calculate the gain or loss on the disposal of old equipment and explain five IPSAS 17 disclosure requirements.
Question
Odeda Agricultural Corporation, a parastatal under Waso State Ministry of Agriculture, operates its business with plant and equipment that qualifies under IPSAS 17 on property, plant, and equipment. On January 1, 2020, the cost of the corporation’s plant was N100,000,000, and the accumulated depreciation was N40,000,000. On January 2, 2020, the corporation bought new equipment at the cost of N100,000,000. The equipment supplier accepted an old piece of equipment owned by the corporation in part exchange for a value of N2,500,000. The old equipment originally cost N8,000,000 and had accumulated depreciation of N5,500,000.
Required:
i. Calculate the gain or loss on the disposal of the old equipment. (5 Marks)
ii. Explain five disclosure requirements of property, plant, and equipment stated at revalued amount in accordance with IPSAS 17. (5 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Depreciation, Disclosure, Equipment Disposal, IPSAS 17, Revaluation
- Level: Level 2
- Topic: Accounting for Government Assets and Liabilities
- Series: NOV 2020