Topic: Accounting for Property, Plant, and Equipment (PPE) IAS 16

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 15 Marks

FA – May 2012 – L1 – SB – Q5 – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

Recording journal entries for three trade-in options for machinery and selecting the most viable option.

Fancy Enterprises has machinery that cost N750,000 with an accumulated depreciation of N510,000. The firm is contemplating acquiring new machinery to replace the old one. The new machinery has a catalog price of N1,290,000 and attracts a 12% trade discount. The following options are available:

(i) Trade in the old machinery and add cash of N895,200.
(ii) Trade in the old machinery and add cash of N600,000.
(iii) Trade in the old machinery and add cash of N1,080,000.

You are required to:

(a) Record journal entries for each of the options, considering the information provided above.
(b) Which of the options is economically viable for the firm to acquire the new machinery?
(14 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 2012 – L1 – SB – Q5 – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

  • 1 Marks

FA – May 2012 – L1 – SA – Q29 – Accounting for Property, Plant, and Equipment (IAS 16)

Calculating the cost of a moulding machine to be stated in the financial statement.

Ishola & Sons Limited purchased a moulding machine for N2,550,000 from Japan, the transport expenses amounted to N250,000, installation cost amounted to N150,000, and the annual maintenance is N170,000. At what cost will the moulding machine be stated in the statement of financial position?

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 2012 – L1 – SA – Q29 – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 1 Marks

FA – May 2012 – L1 – SA – Q7 – Accounting for Property, Plant, and Equipment (IAS 16)

Identifying the correct accounting entry for an increase in asset value due to revaluation.

Which accounting entries should be raised to record an increase in the value of assets on revaluation by the partners?

A. Debit revaluation account and credit partners’ capital account
B. Debit partners’ capital account and credit revaluation account
C. Debit revaluation account and credit partners’ current account
D. Debit revaluation account and credit assets account
E. Debit assets account and credit revaluation account.

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 2012 – L1 – SA – Q7 – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 1 Marks

FA – May 2012 – L1 – SA – Q5 – Accounting for Property, Plant, and Equipment (IAS 16)

Identifying features of non-current assets under IAS 16.

According to IAS 16 – “Accounting for Property, Plant and Equipment” all of the following are features of non-current assets EXCEPT where they are:

A. Held by an enterprise for use in the production or supply of goods and services
B. Expected to be used on a continuing basis
C. Intended for sale in the ordinary course of business
D. Financed by leasehold rights
E. Held for rental to others, or for administration purpose.

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 2012 – L1 – SA – Q5 – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 1 Marks

FA – Nov 2011 – L1 – SA – Q17 – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question asks for the term used to describe the amount agreed to be paid by a tenant to a landlord.

The amount agreed to be paid by a tenant to a landlord for the use of his property for economic reasons is known as?

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 2011 – L1 – SA – Q17 – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

  • 1 Marks

FA – Nov 2020 – L1 – SA – Q18 – Accounting for Property, Plant, and Equipment (IAS 16)

Determines the correct journal entry for the credit purchase of property, plant, and equipment (PPE).

Which of the following journal entries correctly records the credit purchase of property, plant, and equipment (PPE)?

Account to be Debited Account to be Credited
A. PPE register Purchases ledger control
B. Purchase ledger control PPE
C. Bank PPE
D. PPE Supplier of PPE
E. PPE PPE disposal

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 2020 – L1 – SA – Q18 – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 1 Marks

FA – Nov 2020 – L1 – SA – Q14 – Accounting for Property, Plant, and Equipment (IAS 16)

Identifies an item to be classified as capital expenditure.

Which of the following should be classified as capital expenditure?
A. Penalty paid to a supplier for late payment in respect of plant supplied
B. Interest payable on loan used exclusively for the production of self-constructed PPE
C. Staff training cost on the use of equipment
D. Legal fees on debt recovery
E. Bonuses to production operatives

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 2020 – L1 – SA – Q14 – Accounting for 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 2013 – L1 – SA – Q36 – Accounting for Property, Plant, and Equipment (IAS 16)

Understanding the term for when the carrying amount of an asset exceeds its recoverable amount under IAS 16.

In accordance with IAS 16 (Property, Plant and Equipment), the amount by which the carrying amount of an asset exceeds its recoverable amount is called ____________.

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 2013 – L1 – SA – Q36 – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 1 Marks

FA – Nov 2013 – L1 – SA – Q25 – Accounting for Property, Plant, and Equipment (IAS 16)

Understanding the term for a new value resulting from revaluation under IAS 16.

According to IAS 16 (Property, Plant, and Equipment), the new value as a result of a revaluation exercise carried out on property, plant, and equipment, within the context of the historical cost system is called ____________.

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 2013 – L1 – SA – Q25 – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 10 Marks

FA – Nov 2022 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question requires calculating the gain or loss on disposal of a motor vehicle and preparing the necessary ledger accounts.

Propati Limited has a fleet of cars that are used to distribute goods to the market. As at July 1, 2020, the cost of the cars was ₦750,000,000, and their accumulated depreciation was ₦30,500,000. On January 1, 2021, the company bought a new car for ₦2,800,000. One of the old cars, which was acquired 3 years ago at a cost of ₦1,000,000 with accumulated depreciation of ₦600,000, was accepted by the seller in part exchange at a value of ₦480,000. The reporting date of Propati Limited is December 31, and the entity charges depreciation using the straight-line method.

Required:
i. Calculate the gain or loss on disposal of the old car. (2 Marks)
ii. Prepare the following ledger accounts in respect of the transactions:

  • Disposal of motor vehicle account (2 Marks)
  • Motor vehicles account (4 Marks)
  • Accumulated depreciation account (2 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 – Nov 2022 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

  • 5 Marks

FA – Nov 2022 – L1 – SB – Q6a – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question asks for five disclosures required under IAS 16 for property, plant, and equipment.

IAS 16 – Property, Plant and Equipment requires an entity to make certain disclosures in the financial statements for each major class of property, plant and equipment.

Required:
State FIVE of the disclosures under IAS 16. (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 "FA – Nov 2022 – L1 – SB – Q6a – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

  • 1 Marks

FA – Nov 2014 – L1 – SA – Q17 – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

Identifying the correct initial measurement for property, plant, and equipment under IAS 16.

The initial measurement of assets under IAS 16 (Property, Plant and Equipment) is at:

A. Net realizable value
B. Replacement cost
C. Historical cost
D. Revaluation
E. Fair value

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 – Q17 – 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)"

  • 1 Marks

FA – May 2021 – L1 – SA – Q8 – Accounting for Property, Plant, and Equipment (IAS 16)

Calculate the initial cost of equipment including additional expenses.

An entity purchased equipment for ₦20,000. The equipment was transported at ₦86, installation cost was ₦125, abnormal waste of materials was ₦15,000, and training cost of staff on the use of the machine was ₦255. How much should be recorded as the initial cost of the equipment?
A. ₦20,000
B. ₦20,086
C. ₦20,125
D. ₦20,211
E. ₦20,466

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 – SA – Q8 – 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 – Q17 – Accounting for Property, Plant, and Equipment (IAS 16)

Describe the treatment of asset and accumulated depreciation accounts upon disposal.

When a non-current asset is disposed of, what is the typical situation regarding the asset account and the accumulated depreciation account in the general ledger?

  • A. Both the asset account and the accumulated depreciation account will be closed to zero
  • B. The asset account will have a closing balance, but the accumulated depreciation account will be closed to zero
  • C. The asset account will be closed to zero, but the accumulated depreciation account will have a closing balance
  • D. Both the asset account and the accumulated depreciation account will have closing balances to carry forward
  • E. Neither the asset account nor the accumulated depreciation account will have a zero closing balance

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 – Q17 – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 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"

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