Mandeville Limited ( ML ) constructed a distillery on January 1 , 2 0 2 1 .
Fantastic news! We've Found the answer you've been seeking!
Question:
Mandeville Limited ML constructed a distillery on January The distillery is estimatedto have a useful life of years nil residual value from the date it was completed and ready tobe used. The distillery was operational on April but the entity actually commenced useof the distillery on June The distillery was selfconstructed and ML incurred thefollowing costs: direct material, $ million direct labour $ million overheads $ millionOf the total overheads incurred, represents cost overruns due to inefficiencies by the projectmanager and $ represents general administrative overheads. To support withappropriate usage of the distillery, the entity incurred an additional $million to train all theoperators to use the distillery. The costs incurred in constructing the asset are expected to increaseefficiencies and yield significant future economic benefits.Required:
a Determine the depreciation charge for the period ended December marks
b Determine the carrying amount of the asset as at December marks
c Differentiate between capital and revenue expenditure giving an example of each from thescenario above
Posted Date: