A company purchased plant and equipment 4 years ago for $100 000. Depreciation is provided using the straight line method over 10 years. The company decided to revalue the plant and equipment at the end of the fourth year. The carrying amount was $60 000 (100 000 – 40 000). The net replacement cost of the plant and equipment was considered to be $75 000 at that date.
Required:
Calculate, using the 2 methods allowed by IAS16
a)  gross replacement cost
b) accumulated depreciation on gross replacement cost the carrying amount
c) show the journal entries for the calculation

Answer rating: 100% (QA)

A Calculation of gross replacement cost Particular Amount ... View the full answer