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please seniors solve the query please seniors solve the query

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Old Thursday, May 05, 2011
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Unhappy please seniors solve the query
Plant at cost 90,000
Equipment 57,500

Provision for depreciation
Plant 12,500
Equipment 32,500

Depreciation for the year has to be yet provided as follows:
Property 1% using straight line method
Equipment 15% using straight line method

Kindly solve the above query and mention the figures to be posted in income statement and Balance Sheet
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Old Thursday, May 05, 2011
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figures to be posted in P and L

PLANT 90000*.01=900

EQUIPMENT 57500*.15=8625

figures to be included in balance sheet

12500+900=13400

32500+8625=41125

i think you mistyped plant as property while giving depreciation rates.
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Old Friday, May 06, 2011
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yes i mistyped thanks, kindly can you guide me, while going through for computation of Non-current Assets we will deduct the provision of depreciation amount, means

Carrying amount=Non-current assets-provision for depreciation
means in above question
Plant=90000-13400=76600
Equipment=57500-41125=16375
these will be the carrying amount in balance sheet, am i right
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Old Friday, May 06, 2011
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Originally Posted by xavier View Post
yes i mistyped thanks, kindly can you guide me, while going through for computation of Non-current Assets we will deduct the provision of depreciation amount, means

Carrying amount=Non-current assets-provision for depreciation
means in above question
Plant=90000-13400=76600
Equipment=57500-41125=16375
these will be the carrying amount in balance sheet, am i right
WE always mentioned both the values means the real amount of asset or full amount of asset and the Allowance for deprecation aswell...you will mention both the heads...like this

Plant 90,000
Allo for dep(Plant) (13,400)
----------------------------------
Book value 76,600
----------------------------------

same in the case of other fixed assets,

and there is another method that you show the full amount of fixed asset in Asset column and mention the Allowance for Depreciation in Current liabilities section...it totally depends upon you what to chose...
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Last edited by Rixwan; Friday, May 06, 2011 at 01:13 PM.
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Old Friday, May 06, 2011
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and there is another method that you show the full amount of fixed asset in Asset column and mention the Allowance for Depreciation in Current liabilities section...it totally depends upon you what to chose...
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No.This method is outdated and is neither permitted by IFRSs nor allowed by the Companies ordinance-1984.

Only other methods,you mentioned, are permissible.
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