Practice : PPE - Becker revision queston bank 19

Workings ($'000)
1) Initial recognition
Base price
Less trade discount

1,050
(210)
840
30
28
22
920

Freight charges
Electrical installation
Pre production testing
Costs
2) Dpreciation per hour =

(920 - 20) / 6,000 hours

0.15

Depreciation for year 2010 (1,200 hours x 0.15)

Depreciation for year 2011 (1,800 hours x 0.15)

=
=

3) Depreciation per hour for year 2012

Carrying amount at 1 Oct 2011 (920 - 180 - 270)
Upgrade capitalised

470
200
670
(40)
630
4,500 hours
0.14

Revised residual value

Revised depreciable amount
Remaining useful life
Depreciation per hour
Depreciation for year 2012 (850 hours x 0.14)

119

4) Maintenance cost $60,000 is to be amortised over 3 years

Initial cost
Allocated to year 2010
Carrying amount - 2010
Allocated to year 2011
Carrying amount - 2011
Allocated to year 2012
Carrying amount - 2012

180
270

60
(20)
40
(20)
20
(20)
-

Answer
Statement of profit or loss for the year ended 30 September
2010
$'000
Discount income (5% x 840)
Staff training
Depreciation (w2), (w3)
Maintenance (w4)

2011
$'000
42
-

40
180
20

2012
$'000
-

270
20

119
20

Statement of financial position as at 30 September

2010
$'000
Property plant and equipment
Costs
Accumulated depreciation
Carrying amount

Prepayment
Maintenance (w4)

2011
$'000

2012
$'000

920
(180)
740

920
(450)
470

40

20

1,120
(569)
551