JT used its own staff, assisted by contractors when required, to construct a new warehouse for its own use.

Which ONE of the following costs would NOT be included in attributable costs of the warehouse?

YSL bought a new printing machine. The cost of the machine was $80,000. The installation costs were $5,000 and the employees received training on how to use the machine, at a cost of $2,000. Before using the machine to print customers' orders, a test was undertaken and the paper and ink cost $1,000.

What should be the cost of the machine in the company's statement of financial position?

Which of the following statements is correct?

Statement 1: If the revaluation model is used for PPE, revaluations must subsequently be made with sufficient regularity to ensure carrying amount does not differ materially from the fair value at each reporting date.

Statement 2: When an item of property, plant and equipment is revalued, there is no requirement that the entire class of assets to which the item belongs must be revalued.

On 1 July 20X4, ECG opened a chemical reprocessing plant. The plant was due to be active for five years until 30 June 20X9, when it would be decommissioned. At 1 July 20X4, the costs of decommissioning the plant were estimated to be $4 million in 5 years time. The company considers that a discount rate of 12% is appropriate for the calculation of a present value, and the discount factor at 12% for Year 5 is 0.567.

What is the total charge to the statement of profit or loss (depreciation and finance charge) in respect of the decommissioning for the year ended 30 June 20X5?

Demolition Co purchases a machine for $15,000.

After incurring transportation costs of $1,300 and spending $2,500 on installing the machine the company are disappointed when it breaks down and costs $600 to repair. Depreciation is charged at 10% per annum with a full year's charge in the year of acquisition.

What is the net book value of the machine that will be shown in Demolition's statement of financial position at the year end?

John & Co sold an item of used machinery at $5000.

What will be the effect on financial statements?

1. Sales will increase by $5000

2. Profit will increase by $5000

3. Non-Current assets will decrease by $5000

YY buy an asset on 1 March 20X1 with the following costs:

1) Purchase Price 1,000

2) Legal fees 500

3) Admin costs in negotiating the fee 100

4) Future dismantling cost of 200 in 3 years time

Discount rate is 10%

How much is the cost of the asset on 1 March 20X1?

A business sells a non-current asset for $55,000. The asset originally cost $100,000 and accumulated depreciation is $45,000. What is the profit or loss on disposal?

A company buys a machine on 31 August 20X0 for $22,000. It has an expected life of seven years and an estimated residual value of $1,000. On 30 June 20X4 the machine is disposed of for $9,000. The company's year end is 31 December. Its accounting policy is to charge depreciation using the straight line method with a proportionate charge in the years of acquisition and disposal.

What is the profit or loss on disposal of the machine which will appear in the statement of profit or loss for the year ended 31 December 20X4?

Octopus bought a car on 1 January 20X0 for $20,000 and decided to depreciate it at 30% per annum on a reducing balance basis. It was disposed of during the year ended 31 December 20X2 for $12,000. Octopus does not charge depreciation in the year of disposal.

What is the net effect on the statement of profit or loss for the year ended 31 December 20X2?