Question Tag: Property

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 8 Marks

CR – Nov 2014 – L3 – SC – Q4b – Income Taxes (IAS 12)

Evaluate the impact of deferred tax on fair value adjustments for property, plant, and equipment in an acquisition.

On 1 June 2013, Bam Plc acquired Mango Limited for N3,150 million.
The fair value of the identifiable net assets of Mango Limited at this date was N825 million, and N2,550 million and retained earnings and other components of equity were N105 million, respectively. Mango Limited’s share capital was N1,500 million.

The excess of the fair value of the net assets is due to an increase in the value of property, plant, and equipment.

Required:
Evaluate the impact of full deferred tax on the excess of the fair value of the net assets attributable to the increase in the value of property, plant, and equipment of Bam Plc.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – Nov 2014 – L3 – SC – Q4b – Income Taxes (IAS 12)"

  • 12 Marks

CR – Nov 2014 – L3 – SB – Q4a – Income Taxes (IAS 12)

Compute the impact of deferred tax on retained earnings and advise Lagos Plc on IAS 12 compliance.

The following is the statement of financial position of Lagos Plc as at 31 December, 2013, with its immediate two comparative years.

The management of Lagos Plc is not sure of the impact of IAS 12 (Income Taxes) on its retained earnings as at 31 December, 2013, as well as what the new deferred tax balance will be on migrating to IFRS.

The following information was also available as at the year-end:

Details Value (N’000)
Tax written down value of PPE 40,300
Tax written down value of goodwill 4,300
Tax base of trade receivables 29,800
Tax base of trade payables 13,000

Assume that current tax has been correctly computed in line with the applicable tax laws at 30%.

Required:
Using relevant computations, advise the management of Lagos Plc on the impact of deferred tax calculated on retained earnings in accordance with IAS 12.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – Nov 2014 – L3 – SB – Q4a – Income Taxes (IAS 12)"

  • 20 Marks

AAA – May 2024 – L3 – SB – Q2 – Overview of Advanced Audit and Assurance

Discuss audit review types, include necessary IAS 16 and IAS 36 information in the audit checklist, and advise on misclassified asset treatment.

The statement below is an extract of property, plant and equipment from the “notes to the financial statements” of ABC Plc:

Land and buildings Plant, equipment, fixtures and fittings, and motor vehicles Total
Costs (₦)
At January 1, 2020 75,230,481 120,454,850 195,685,331
Additions 12,540,000 16,000,500 28,540,500
Acquisitions through business combinations 24,400,000 35,750,430 60,150,430
Classified as held for sale (10,200,450) (15,450,600) (25,651,050)
Disposals (5,000,465) (10,700,250) (15,700,715)
At December 31, 2020 96,969,566 146,054,930 243,024,496
Accumulated depreciation and impairment losses
At January 1, 2020 46,660,254 66,675,860 113,336,114
Depreciation charge for the year 5,594,523 17,220,518 22,815,041
Classified as held for sale (7,650,338) (9,270,000) (16,920,338)
Disposals (3,762,523) (9,034,069) (12,796,592)
Impairment losses 5,267,533 6,022,713 11,290,246
Reversal of Impairment losses (4,515,028) (4,818,170) (9,333,198)
At December 31, 2020 41,594,421 66,796,852 108,391,273

Net carrying amount
At December 31, 2020: ₦55,375,145 (Land and buildings), ₦79,258,078 (Plant, equipment, fixtures, and fittings, and motor vehicles), Total: ₦134,633,223
At December 31, 2019: ₦28,590,212 (Land and buildings), ₦53,778,390 (Plant, equipment, fixtures, and fittings, and motor vehicles), Total: ₦82,368,602

The above was the situation of the statement of financial position of the company when it was signed at the board of directors meeting. During further review to sign off the audit file, it was discovered that the classification of some of the assets as impaired was due to wrong classification and the value had actually increased due to a new road network in the location. This affected the impairment losses for the year. The new value of the buildings affected and shown in the note above as available from market survey had actually grown to ₦8.5 million within the period under review.

Required:

  1. Evaluate the different types of audit review, the purposes, and the scope of the reviews. (10 Marks)
  2. Discuss the necessary information to be included in the audit checklist based on the information above in relation to IAS 16 – Property, Plant, and Equipment and IAS 36 – Impairment of Assets. (7 Marks)
  3. Advise on the treatment of the issue raised with regard to the wrongly classified assets. (3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – May 2024 – L3 – SB – Q2 – Overview of Advanced Audit and Assurance"

  • 20 Marks

CR – May 2024 – L3 – SB – Q3 – Income Taxes (IAS 12)

Deferred tax impact analysis for asset purchase, fair value adjustments, and subsidiary profit

Below is the statement of financial position (extract) of Bamboo PLC, a company with several subsidiaries across various regions, including one foreign subsidiary, Pako Limited, based in the USA:

Draft Statement of Financial Position
As at October 31, 2023

Assets N’m
Deferred tax 77
Other non-current assets 2,329
Inventories and other current assets 1,150
Cash and cash equivalents 422
Total assets 3,978
Liabilities and Equity
Other non-current liabilities 1,671
Deferred tax liabilities 186
Payables and accruals 1,131
Total liabilities 2,988
Equity
Share capital 250
Share premium 120
Retained earnings 620
Total equity 990
Total liabilities and equity 3,978

During the preparation of the final draft of the financial statements, the following issues regarding deferred tax implications were raised:

  1. Property, Plant, and Equipment
    • On November 1, 2022, Bamboo PLC acquired an asset for N120 million, which qualified for a government capital grant of N20 million. The asset has a five-year useful life with straight-line depreciation. Capital allowances are restricted by the grant amount, and tax laws allow a 25% annual capital allowance rate.
  2. Fair Value Adjustments
    • Bamboo PLC acquired Iroko Limited for N100 million, with net assets fair valued at N80 million against a tax base of N70 million. The difference relates to property, plant, and equipment that Iroko Limited intends to hold long-term.
  3. Profit from Foreign Subsidiary
    • Bamboo PLC’s foreign subsidiary, Pako Limited, has $5,000 in undistributed post-acquisition profit, which would incur a N4 million tax if remitted to Nigeria. Bamboo PLC plans to retain these earnings for Pako Limited’s reinvestment.

Required:

a. Briefly explain and calculate, where applicable, the deferred tax implications for each transaction. (15 Marks)

b. Show the deferred tax effects on the draft statement of financial position for Bamboo PLC. (5 Marks)

Note: Use a 30% tax rate for calculations.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – May 2024 – L3 – SB – Q3 – Income Taxes (IAS 12)"

  • 8 Marks

FR – Nov 2023 – L2 – Q3a – Property, Plant, and Equipment (IAS 16)

Explain reclassification criteria for transferring investment property to PPE.

a. If a property is transferred into or out of the category of property, plant and equipment (PPE), it might be reclassified as investment property or as no longer an investment property.

A transfer of investment property can only be made where there is a change of use of such property.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2023 – L2 – Q3a – Property, Plant, and Equipment (IAS 16)"

  • 5 Marks

FR – Nov 2014 – L2 – Q7a – Property, Plant and Equipment (IAS 16)

Identify the elements of cost for PPE and provide examples of directly attributable costs.

a. IAS 16 covers all aspects of accounting for Property, Plant and Equipment (PPE), including its measurement and qualification for recognition as an asset. The standard also describes the elements of cost, stating that some costs are directly attributable to the costs of PPE while some other costs fail to qualify as costs of an item of PPE.

Required:

In the context of IAS 16, identify the elements of cost of an item of Property, Plant, and Equipment, giving SIX examples of directly attributable costs. (5 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2014 – L2 – Q7a – Property, Plant and Equipment (IAS 16)"

  • 15 Marks

FR – Nov 2014 – L2 – Q6 – Property, Plant and Equipment (IAS 16)

Analyze the Property, Plant, and Equipment of Skelewu Nigeria Limited and compute the deferred tax implications.

Skelewu Nigeria Limited owns the following Property, Plant and Equipment as at 31 December 2011.

 

Additional pieces of information are:

(i) Plant and Machinery are depreciated on a straight-line basis over 5 years. The plant & machinery was acquired on 1 January 2011.
(ii) Land is not depreciated.
(iii) Buildings are depreciated on a straight-line basis over 25 years.
(iv) Depreciation on office buildings is not deductible for tax purposes, but for the plant and machinery; tax deductible is granted over a period of 3 years in the ratio 50:30:20 percent of cost consecutively.
(v) The accounting profit before tax amounted to N15,000,000 for the 2012 financial year and N20,000,000 for the year 2013. These figures include non-taxable revenue of N4,000,000 in year 2012 and N5,000,000 in year 2013.
(vi) Skelewu Nigeria Limited had a tax loss on 31 December 2011 of N12,500,000. The tax rate for year 2011 was 35% and 30% for each of the years 2012 and 2013.

Required:

a. In accordance with IAS 12 on Income Taxes, differentiate between Current Tax and Deferred Tax. (2 Marks)

b. Prepare the Deferred Tax Account for the year ended 31 December 2013. (10 Marks)

c. Advise the Directors of Skelewu Nigeria Limited on the reasons why it is necessary to recognize or make provision for Deferred Tax in the company’s Financial Statements. (3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2014 – L2 – Q6 – Property, Plant and Equipment (IAS 16)"

  • 12 Marks

FR – Nov 2019 – L2 – Q1a – Property, Plant, and Equipment (IAS 16)

Explain the classification and measurement differences between investment properties and property, plant, and equipment.

You are the Financial Controller of Uchena Nigeria plc. The company was established about 15 years ago. At the last annual general meeting of the company, a new Managing Director was appointed.

The new Managing Director is a non-finance executive with very little knowledge of accounting. He has requested for the past five years financial statements of the company for review.

He has prepared a list of issues based on his review as follows:

  1. When I look at the statement of financial position of one of the past financial statements, one of the categories of non-current asset is investment properties and another category is property, plant, and equipment, in which all other properties are included. It is certain that the company invested in properties, so why do you have two categories for them in the statement of financial position? How did you decide what goes where?
  2. A note to the financial statements states that investment properties are measured at their fair values and not depreciated. Don’t all non-current assets have to be depreciated over their estimated useful lives?
  3. Another note to the financial statements states that property included in the property, plant, and equipment is measured at cost less accumulated depreciation rather than at fair value. Shouldn’t all properties be measured in financial statements on a consistent basis?
  4. Finally, I can’t see from the financial statements where gains or losses relating to the measurement of investment properties are included; the profit statement includes two main components: profit or loss and other comprehensive income; where would the gains or losses go? Presumably, the treatment of gains or losses is the same for any non-current assets, which one is measured at fair value?

Required:

Provide answers to the issues raised by the Managing Director. You should justify your answers with reference to the relevant IFRS. (12 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2019 – L2 – Q1a – Property, Plant, and Equipment (IAS 16)"

  • 5 Marks

FR – Nov 2021 – L2 – Q7b – Property, Plant, and Equipment (IAS 16)

Explain the two methods of valuation for property, plant, and equipment as per IAS 16.

AS 16 prescribes the principles and models of the valuation in recognizing items of property, plant, and equipment in the financial statements of an entity.

Required:
Briefly explain the TWO methods of valuation recognized in IAS 16 – property, plant, and equipment.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2021 – L2 – Q7b – Property, Plant, and Equipment (IAS 16)"

  • 1 Marks

FA – Nov 2012 – L1 – SA – Q9 – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

Identifying what does not lead to improvement of property, plant, and equipment.

Which of these may NOT lead to improvement in respect of Property, Plant and Equipment?

A. Extension of economic life of the asset
B. Repairs and maintenance of asset
C. Increased quality of output
D. Faster production
E. Reduced operating costs

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2012 – L1 – SA – Q9 – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

  • 1 Marks

FA – Nov 2014 – L1 – SA – Q13 – Accounting for Property, Plant, and Equipment (IAS 16)

Calculating the amount to be capitalized as cost of property, plant, and equipment.

Given the following information:

  • Cost of property, plant and equipment: N5,000,000
  • Administrative and general overhead: N750,000
  • Installation cost of property, plant & equipment: N500,000
  • Cost of entertainment: N150,000

What amount should be capitalized as cost of property, plant, and equipment?

A. N5,500,000
B. N6,250,000
C. N6,400,000
D. N6,700,000
E. N6,900,000

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2014 – L1 – SA – Q13 – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 20 Marks

FA – May 2021 – L1 – SB – Q3 – Accounting for Property, Plant, and Equipment (IAS 16)

The question involves calculation of gain or loss on disposal of assets and disclosure of PPE movement under IAS 16.

Super Limited trades in farm feeds. The following information was extracted from its books as at 1 July 2018.

Description Amount (₦)
Property Cost 6,000,000
Plant and Machinery 2,419,000
Motor Vehicles 585,000
Accumulated Depreciation – Property 1,200,000
Accumulated Depreciation – Plant 687,000
Accumulated Depreciation – Motor Vehicles 210,000

During the year ended 30 June 2019, the following transactions took place:

(i) Additions to plant amounted to ₦231,000.

(ii) A plant that cost ₦415,500 with accumulated depreciation of ₦293,000 was sold for ₦129,000.

(iii) A new car was bought for ₦61,500, and a part-exchange allowance of ₦15,871 was received against an old car. The old car originally cost ₦55,548 and had accumulated depreciation of ₦39,536.

(iv) Depreciation is charged on PPE at the following rates:

  • Property: 2% p.a. straight line
  • Plant: 20% p.a. straight line
  • Motor Vehicles: 25% p.a. reducing balance

Required:

a) Calculate the gain or loss on the disposal of plant and the old car.
b) Show the disclosure (schedule of movement) under IAS 16 for the non-current assets for the year ended 30 June 2019.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2021 – L1 – SB – Q3 – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 6 Marks

FA – Nov 2023 – L1 – SB – Q4B – Accounting for Property, Plant, and Equipment (IAS 16)

Calculate the initial measurement of a motor vehicle for a business.

Caleb Limited has recently purchased a motor vehicle for its business operations. The company incurred various costs in acquiring, preparing, and operating the motor vehicle. The following information is available:

  1. Purchase price of motor vehicle – ₦5,000,000
  2. Annual insurance premium – ₦120,000
  3. Transportation costs to the company’s location – ₦50,000
  4. Installation costs for specialized equipment – ₦150,000
  5. License and registration fees – ₦80,000
  6. Fuel and maintenance expenses (for the first month of operation) – ₦70,000
  7. Legal fees for acquisition – ₦100,000

Required:
Calculate the initial measurement of the motor vehicle.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2023 – L1 – SB – Q4B – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 8 Marks

FA – Nov 2023 – L1 – SB – Q4A – Accounting for Property, Plant, and Equipment (IAS 16)

Describe and explain cost elements for PPE under IAS 16.

Provide a concise description of each cost element associated with Property, Plant, and Equipment (PPE) under IAS 16, and explain the conditions under which these costs are capitalized.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2023 – L1 – SB – Q4A – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 1 Marks

FA – Nov 2023 – L1 – SA – Q12 – Regulatory Environment of Accounting

Identify disclosure requirements for property, plant, and equipment under IAS 16.

In the notes to the financial statements, which of the following is NOT required to be disclosed regarding property, plant and equipment under IAS 16?

  • A. The fair value of the assets at the beginning and end of the period
  • B. The current market value of the assets at the end of the period
  • C. The gross carrying amounts and accumulated depreciation at the beginning and end of the period
  • D. The expected useful lives of the assets and their residual values
  • E. The total amount of additions made to the property, plant and equipment during the year

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2023 – L1 – SA – Q12 – Regulatory Environment of Accounting"

  • 1 Marks

FA – Nov 2023 – L1 – SA – Q5 – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

Identify non-disclosure requirements for property, plant, and equipment.

Which of the following is NOT a disclosure requirement for property, plant and equipment, as per IAS 16 – Property, Plant and Equipment?

  • A. The measurement bases used for determining the gross carry amount of property, plant and equipment
  • B. The number of inspections carried out on items of property, plant and equipment
  • C. The depreciation methods used for each major class of property, plant and equipment
  • D. The impairment losses recognised during the period
  • E. The total cost of property, plant and equipment acquired through business combinations

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2023 – L1 – SA – Q5 – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

  • 20 Marks

FR – Nov 2017 – L2 – Q3 – Financial Statements Correction

Adjust the draft statement of financial position and profit figures for Okushe Ltd considering the necessary corrections and revaluations.

Okushe Ltd is a listed textile manufacturing company that prepared the following draft statement of financial position as at 31 October 2017. On subsequent examination of the books and records, the Finance Director prepared a list of issues that may require amendments to the draft statement presented.

Okushe Ltd Statement of Financial Position as at 31 October 2017

GH¢000
Non-current assets
Property, Plant & Equipment 1,020,000
Intangible assets 100,000
Equity investments 360,000
Total non-current assets 1,480,000
Current assets
Inventory 65,000
Trade receivables 130,000
Cash & bank 30,000
Total current assets 225,000
Total assets 1,705,000
Equity
Equity share capital 580,000
Retained Earnings:
– Balance 1 November 2016 375,000
– Profit for year 95,000
– Dividend declared (30,000)
Total Retained Earnings 440,000
Other components of equity:
– Balance 1 November 2016 128,000
– Other comprehensive income for the year 35,000
Total other components of equity 163,000
Total equity 1,183,000
Non-current liabilities
Finance lease obligations 175,000
5% debenture 2021 150,000
Total non-current liabilities 325,000
Current liabilities
Trade payables 95,000
Finance lease obligations 35,000
Provision for warranty claim 12,000
Corporation tax due 25,000
Final dividend due 30,000
Total current liabilities 197,000
Total equity & liabilities 1,705,000

The following notes are relevant:

  1. Property, Plant and Equipment (PPE):
    • The property carried at GH¢130 million was revalued to GH¢110 million on 31 October 2017. This revaluation has not been accounted for. The revaluation reserve (included in other components of equity) had a balance of GH¢12 million due to previous revaluations of this property.
    • A sale agreement was entered during October 2017 to sell some plant with a carrying value of GH¢45 million for an agreed price of GH¢39 million. No cash has been received, as a 30-day credit period was agreed with the purchaser. No entry has been made for this transaction.
  2. Equity Investments:
    • The fair value of equity investments as at 31 October 2017 was GH¢380 million, which has not yet been incorporated into the financial statements. Okushe has decided to take all fair value gains and losses on equity investments to “other comprehensive income” as permitted by IFRS 9 – Financial Instruments.
  3. 5% Debenture:
    • The 5% debenture was issued on 1 November 2016 for cash proceeds of GH¢150 million and was correctly recorded. The effective rate of interest to maturity was 6.5%. The only other entry made in respect of the debenture was the payment of GH¢7.5 million interest on 31 October 2017.
  4. Warranty Provision:
    • The company offers a 12-month warranty on all goods sold. A provision is maintained for the expected cost of honoring this warranty, which has not been updated as at 31 October 2017. 40,000 units of its product were sold during the year, all qualifying for warranty. It expects 10% will need minor repairs at an average cost of GH¢500 each, and 3% will need major repairs at a cost of GH¢10,000 each.

Required:

a) Prepare a schedule showing any corrections required to the profit and other comprehensive income for the year. (8 marks)

b) Redraft the Statement of Financial Position at 31 October 2017, considering the above adjustments. (12 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2017 – L2 – Q3 – Financial Statements Correction"

  • 12 Marks

FA – May 2023 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (IAS 16)

Calculation of gain or loss on disposal and recording the acquisition and disposal of cars in ledger accounts.

The carrying amount of ten cars used by Bayo Limited on January 1, 2017, was N12,000,000 and the accumulated depreciation was N3,200,000. On January 2, 2017, the entity bought a new car costing N2,000,000. The dealer accepted a car owned by the entity in part exchange at a value of N160,000. The car originally cost N1,200,000 and its accumulated depreciation was N1,080,000.

i. Calculate the gain or loss on disposal of the old car. (4 Marks)

ii. Show how the purchase of the new car and the disposal of the old car will be recorded in the ledger accounts of Bayo Limited. (8 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2023 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 1 Marks

FA – May 2023 – L1 – SA – Q8 – Accounting for Property, Plant, and Equipment (IAS 16)

Identifying when depreciation on property, plant, and equipment starts according to IAS 16.

When is depreciation on property, plant and equipment required to start in accordance with IAS 16?

A. At the date the asset was purchased

B. When payment to the vendor is completed

C. When the assets are put to use by the management

D. When the assets are available for use

E. After employees are trained on the use of the assets

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2023 – L1 – SA – Q8 – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 12 Marks

FA – May 2017 – L1 – SB – Q2a – Accounting for Property, Plant, and Equipment (IAS 16)

Calculate the value of Land & Building, Plant & Machinery, and Motor Vehicle based on given transactions.

a. The following transactions are extracts from the records of Votle Limited in 2016, the year of commencement of its business operations.

Date Transaction Description Amount (₦’000)
1 January Cost of land acquisition brought forward 7,500
1 January Building construction work in progress brought forward 9,675
10 January Invoice price of imported machinery received 13,000
10 January Agency fees for land acquisition paid 750
12 January Discount on purchase of machinery (400)
12 January Freight and insurance of machinery 300
12 January Import duties on machinery paid 630
15 January Cost of additional construction materials used paid 3,550
21 January Legal fees for land acquisition agreement paid 350
25 January Clearing agent’s fees for machinery paid 315
31 January Initial ground rent for land paid 600
2 February Annual ground rent for land paid 250
7 February Cost of fairly used motor vehicle paid 3,750
14 February Cost of haulage of machinery 252
14 February Cost of major repair to bring the motor vehicle into a usable condition 1,550
22 February Cost of construction of platform for machinery paid 1,050
25 February Cost of labour used in construction of building paid 1,975
28 February Architect’s fees in respect of building construction paid 1,250
4 March Cost of connection of power and water to machinery 1,450
6 March Repair and maintenance of motor vehicle 250
10 March Cost of testing the machinery 603
15 March Cost of commissioning the building 950

Required:
Determine the value of the following non-current assets brought into use as at March 15, 2016.
i. Land and Building (4 Marks)
ii. Plant and Machinery (4 Marks)
iii. Motor Vehicle (4 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2017 – L1 – SB – Q2a – Accounting for Property, Plant, and Equipment (IAS 16)"

Elevate your professional expertise across key business domains with our comprehensive training programs

Our offerings

Contact Info

  • +233203701923
    +233543919232
  • info@knowsia.com

Customer

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope
Oops!

This feature is only available in selected plans.

Click here to view all plans

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

Login
Upgrade Plan

If you’re not subscribed to a plan, click on the button below to choose a plan

Subscribe to a plan