The draft accounts for Friends Ltd for the year ended 31 December 2015 included the following:...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The draft accounts for Friends Ltd for the year ended 31 December 2015 included the following: Machine at cost Accumulated depreciation Net book value £ 120,000 Expected selling price of the machine Disposal cost of the machine Expected discounts cash flows over the next three years 75,000 45,000 The machine is depreciated at an annual rate of 12.5% using the straight-line method. Due to adverse changes in technology, the company has conducted an impairment test at the end of 2015 and the following information has become available: £ 44,000 2,000 38,000 Required a) Calculate the impairment loss at 31 December 2015. b) Redraft the plant and equipment note to reflect the impairment on 31st December 2015. c) Draft the plant and equipment note for 2016. d) In December 2016 there was an evidence of an increase in the market value of the machine and the machine now has a recoverable amount of £31,000. You are required to redraft 2016's plant and equipment note to reflect this change in December 2016 and determine the maximum amount to be reversed from the impairment loss. The draft accounts for Friends Ltd for the year ended 31 December 2015 included the following: Machine at cost Accumulated depreciation Net book value £ 120,000 Expected selling price of the machine Disposal cost of the machine Expected discounts cash flows over the next three years 75,000 45,000 The machine is depreciated at an annual rate of 12.5% using the straight-line method. Due to adverse changes in technology, the company has conducted an impairment test at the end of 2015 and the following information has become available: £ 44,000 2,000 38,000 Required a) Calculate the impairment loss at 31 December 2015. b) Redraft the plant and equipment note to reflect the impairment on 31st December 2015. c) Draft the plant and equipment note for 2016. d) In December 2016 there was an evidence of an increase in the market value of the machine and the machine now has a recoverable amount of £31,000. You are required to redraft 2016's plant and equipment note to reflect this change in December 2016 and determine the maximum amount to be reversed from the impairment loss.
Expert Answer:
Answer rating: 100% (QA)
a calculation of impairment Net book value b value in use ie ... View the full answer
Related Book For
South Western Federal Taxation 2015
ISBN: 9781305310810
38th edition
Authors: William H. Hoffman, William A. Raabe, David M. Maloney, James C. Young
Posted Date:
Students also viewed these accounting questions
-
Senior management of Company ABC is contemplating launching a "LBO" on the company whose shares are currently underperforming due to chronic lack lustre sales. It is currently trading at $12/share...
-
Use EXCEL Solver to obtain a solution to the linear programming problem from part e together with an Answer Report and a Sensitivity Report Provide a printout of your EXCEL spreadsheet and of the two...
-
Warburton Health Centre provides medical imaging services: X-Rays, Ultrasound, CT Scan and MRI. The Health Centre would like to allocate costs using Activity Based Costing. Costs and cost drivers are...
-
State the density property of a barometer liquid and explain its effects. Explain in detailed.
-
Sheinhardt Wig Company is considering a project that has the following cash flows: If the appropriate discount rate is 10 percent, what is the projects discounted payback? PROJECT YEAR CASH FLOW...
-
The circuit parameters of the diff-amp shown in Figure 11.2 are \(V^{+}=3 \mathrm{~V}, V^{-}=-3 \mathrm{~V}\), and \(I_{Q}=0.25 \mathrm{~mA}\). Base currents are negligible and \(V_{A}=\infty\) for...
-
When you should file a notice of lien?
-
Mansfield Corporation had 2013 sales of $100 million. The balance sheet items that vary directly with sales and the profit margin are as follows: Percent Cash ..............5% Accounts receivable...
-
The Charlotte Corporation manufactures filing cabinets in two operations: machining and finishing. It provides the following information: (Click the icon to view the department information.) Each...
-
Peyton Smith enjoys listening to all types of music and owns countless CDs. Over the years, Peyton has gained a local reputation for knowledge of music from classical to rap and the ability to put...
-
10 b. A moveable (massless and frictionless) bar with a length of L m is being moved at a constant velocity of m/s from left to right along two conducting rails by an external force, F, as shown in...
-
For one of the binary systems listed in Table 13.10, based on Eq. (13.19) and the NRTL equation, prepare a txy diagram for P = 101.33 kPa. Problems 13.43 through 13.54 require parameter values for...
-
Assume you could make a decision upon each memory reference whether or not you want the requested address to be cached. What impact could this have on miss rate? In this exercise, we will examine how...
-
The table below contains the link-level details of two different procedures. In this exercise, you will be taking the place of the linker. Link the object files above to form the executable file...
-
Write an MIPS assembly language program to calculate the product of the signed integers A and B. State if you are using the approach given in 3.4.4 or 3.4.5. Problem 3.4.4 When multiplying signed...
-
What is the address of the exception handler in 4.25.3? What happens if there is an invalid instruction at that address in instruction memory? Exercise 4.25.3 If the second instruction from this...
-
A 2200 kg car is moving at a speed of 31.0 m/s. Determine the stopping distance (in meters) if the brakes supply a force of 3500 newtons.
-
On 1 July 2021, Croydon Ltd leased ten excavators for five years from Machines4U Ltd. The excavators are expected to have an economic life of 6 years, after which time they will have an expected...
-
Prepare a graph for your school's Accounting Club of the Federal income tax rates that apply at taxable income levels up to $200,000 for each filing status.
-
B. J. and Carolyn Grace are full-time employees. B. J. is an elementary school teacher, and Carolyn is a registered nurse at a hospital. During the year, they incur the following employment-related...
-
Michael Robertson (1635 Maple Street, Syracuse, NY 13201) exchanges property (basis of $200,000 and fair market value of $850,000) for 75% of the stock of Red Corporation. The other 25% is owned by...
-
A written representation from a clients management which, among other matters, acknowledges responsibility for the fair presentation of financial statements, should normally be signed by the a. Chief...
-
Which of the following expressions is least likely to be included in a clients representation letter? a. No events have occurred subsequent to the balance sheet date that require adjustments to, or...
-
What are computer-assisted audit programs?
Study smarter with the SolutionInn App