At 31 December 20X3 Q, a limited liability company, owned a building that had cost $800,000 on 1 January 20W4.

It was being depreciated at 2% per year.

On 31 December 20X3 a revaluation to $1,000,000 was recognized. At this date the building had a remaining useful life of 40 years.

What is the balance on the revaluation surplus at 31 December 20X3 and the depreciation charge in the statement of profit or loss for the year ended 31 December 20X4?

On 1 January 20X7 a building with a carrying amount of $700,000 was revalued to $750,000. The remaining useful life at that date was 25 years.

On 1 January 20X9 the building was sold for $800,000.

What profit on disposal of the building will be reported in the statement of profit or loss for the year ended 31 December 20X7?

Gamma purchases a motor vehicle on 30 September 20X1 for $15,000 on credit. Gamma has a policy of depreciating motor vehicles using the reducing balance method at 15% per annum, pro rata in the years of purchase and sale.

What are the correct ledger entries to record the purchase of the vehicle at 30 September 20X1 and what is the depreciation charge for the year ended 30 November 20X1?

Baxter Co purchased an asset for $100,000 on 1.1.X1. It had an estimated useful life of 5 years and it was depreciated using the straight line method. On 1.1.X3 Baxter Co revised the remaining estimated useful life to 8 years.

What is the carrying amount of the asset at 31.12.X3?

Lance is entering an invoice for a new item of equipment in the accounts. The invoice shows the following costs:

Lance is registered for sales tax. What is the total value of capital expenditure on the invoice?

Which of the following costs would be classified as capital expenditure for a restaurant business?

Evans Co purchased a machine with an estimated useful life of 10 years for $76,000 on 30 September 20X5. The machine had a residual value of $16,000.

What are the ledger entries to record the depreciation charge for the machine in the year ended 30 September 20X8?

Which of the following items should be included in current assets?

(i) Assets which are not intended to be converted into cash
(ii) Assets which will be converted into cash in the long term
(iii) Assets which will be converted into cash in the near future

Y purchased some plant on 1 January 20X0 for $38,000. The payment for the plant was correctly entered in the cash book but was entered on the debit side of the plant repairs account.

Y charges depreciation on the straight line basis at 20% per year, with a proportionate charge in the years of acquisition and disposal, and assuming no scrap value at the end of the life of the asset.

How will Y's profit for the year ended 31 March 20X0 be affected by the error?

B acquired a lorry on 1 May 20X0 at a cost of $30,000. The lorry has an estimated useful life of four years, and an estimated resale value at the end of that time of $6,000. B charges depreciation on the straight line basis, with a proportionate charge in the period of acquisition.

What will the depreciation charge for the lorry be in B's accounting period to 30 September 20X0?

A non-current asset (cost $15,000, depreciation $10,000) is given in part exchange for a new asset costing $20,500. The agreed trade-in value was $5,500.

Which of the following will be included in the statement of profit or loss?

Which one of the following costs would be classified as revenue expenditure on the invoice for a new company car?

Banter Co purchased an office building on 1 January 20X1. The building cost was $1,600,000 and this was depreciated by the straight line method at 2% per year, assuming a 50-year life and nil residual value. The building was re-valued to $2,250,000 on 1 January 20X6. The useful life was not revised. The excess depreciation charge will be transferred from the revaluation surplus to retained earnings each year. The company's financial year ends on 31 December.

What is the balance on the revaluation surplus at 31 December 20X6?
$_______

Banjo Co purchased a building on 30 June 20X8 for $1,250,000. At acquisition, the useful life of the building was 50 years. Depreciation is calculated on the straight-line basis. 10 years later, on 30 June 20Y8 when the carrying amount of the building was $1,000,000, the building was revalued to $1,600,000. Banjo Co has a policy of transferring the excess depreciation on revaluation from the revaluation surplus to retained earnings.

Assuming no further revaluations take place, what is the balance on the revaluation surplus at 30 June 20Y9?

The carrying amount of a company's non-current assets was $200,000 at 1 August 20X0. During the year ended 31 July 20X1, the company sold non-current assets for $25,000 on which it made a loss of $5,000.

The depreciation charge for the year was $20,000. What was the carrying amount of non- current assets at 31 July 20X1?

Which of the following statements describes current assets?

Senakuta Co purchased a machine with an estimated useful life of 5 years for $34,000 on 30 September 20X5. Senakuta Co planned to scrap the machine at the end of its useful life and estimated that the scrap value at the purchase date was $4,000. On 1 October 20X8, Senakuta revised the scrap value to $2,000 due to the decreased value of scrap metal.

What is the depreciation charge for the year ended 30 September 20X9?

A car was purchased by a newsagent business in May 20X0 for:

The business adopts a date of 31 December as its year end.

The car was traded in for a replacement vehicle in August 20X3 at an agreed value of $5,000.

It has been depreciated at 25% per annum on the reducing balance method, charging a full year's depreciation in the year of purchase and none in the year of sale.

What was the profit or loss on disposal of the vehicle during the year ended December 20X3?

$_______ profit.

Which one of the following assets may be classified as a non-current asset in the financial statements of a business?

Company J's head office building had a carrying amount of $400,000 at 1 January 20X4 and 30 years useful life remaining. It was revalued on that date to $600,000 with no change to the useful life.

On 1 January 20X6, following a property slump, it was sold for $450,000.

What amount (if any) should be charged against profit or loss as loss on disposal?

A company purchased an asset on 1 January 20X3 at a cost of $1,000,000. It is depreciated over 50 years by the straight line method (nil residual value), with a proportionate charge for depreciation in the year of acquisition and the year of disposal. At 31 December 20X4 the asset was re-valued to $1,200,000. There was no change in the expected useful life of the asset.

The asset was sold on 30 June 20X5 for $1,195,000.

What profit or loss on disposal of the asset will be reported in the statement of profit or loss of the company for the year ended 31 December 20X5?

Which of the following best explains what is meant by 'capital expenditure'?