On 1 January 20X2, Carlton Ltd purchased an asset for $20,000. The asset is expected to...
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On 1 January 20X2, Carlton Ltd purchased an asset for $20,000. The asset is expected to have a residual value of $3,000 and a useful life of 10 years. The straight-line method is being used. On 1 January 20X5, Carlton changed the useful life of the asset. The remaining useful life of the asset is revised on 1 January 20X5 at 6 years and no residual value is expected anymore. Requirement: a) Explain how the transaction shall be treated under IAS 8 "Accounting policies, changes in accounting estimates and errors". b) Calculate the depreciation expense and the carrying amount of the asset on 31 December 20X5. On 1 January 20X2, Carlton Ltd purchased an asset for $20,000. The asset is expected to have a residual value of $3,000 and a useful life of 10 years. The straight-line method is being used. On 1 January 20X5, Carlton changed the useful life of the asset. The remaining useful life of the asset is revised on 1 January 20X5 at 6 years and no residual value is expected anymore. Requirement: a) Explain how the transaction shall be treated under IAS 8 "Accounting policies, changes in accounting estimates and errors". b) Calculate the depreciation expense and the carrying amount of the asset on 31 December 20X5.
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Answer rating: 100% (QA)
Answer A As per IAS 8 Changes in accounting estimates result from new information or new development... View the full answer
Related Book For
Cost Management Accounting and Control
ISBN: 978-0324559675
6th Edition
Authors: Don R. Hansen, Maryanne M. Mowen, Liming Guan
Posted Date:
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