(i) When its airport terminals and runways were constructed at a cost of 476 million, an Airport...
Question:
(i) When its airport terminals and runways were constructed at a cost of £476 million, an Airport Authority estimated the economic life at 40 years and depreciated them from 1 January 1997, the date of commencement of use, using the straight-line method. In a review that took place on 1 January 2012 the estimate of economic life is revised to 100 years.
(ii) A machine acquired for £160,000 on 1 July 2010 is depreciated at 25% per annum using the reducing balance method. As from 1 January 2012 the management decides that the straightline method, assuming remaining economic life of three years, would better reflect the pattern of consumption of economic benefits from the machine.
Required:
What is the total depreciation to be written off in the year ending on 31 December 2012 for the airport terminals and the machine?
Step by Step Answer:
Financial Accounting An Introduction
ISBN: 9780273737650
2nd Edition
Authors: Mr Barry Elliott, Mr Augustine Benedict