Exeter plc acquired land for 400,000 and related expenses on conveyancing and stamp duty amounted to 50,000. The construction of


Exeter plc acquired land for £400,000 and related expenses on conveyancing and stamp duty amounted to £50,000. The construction of the company headquarters commenced on 1 February 2012, and with an interruption of a month, because of heavy rain, was completed by 31 October 2012, at a cost of £650,000, though the company did not move into the premises till 1 December of the same year. Financing of the construction was intended to be partly from issuing a loan note, but the 8% Loan notes of £500,000 could not be issued until 1 April 2012. Exeter plc does not depreciate land and depreciates buildings at 20% per annum on cost.


Explain with reasons the amount at which the land and building will be reported on the company’s Statement of financial position on 31 December 2012.

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Related Book For  answer-question

Financial Accounting An Introduction

ISBN: 9780273737650

2nd Edition

Authors: Mr Barry Elliott, Mr Augustine Benedict

Question Details
Chapter # 21- Accounting for tangible non-current assets
Section: Test questions
Problem: 2
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Question Posted: August 31, 2023 02:25:29