On 1st July 2009 MKU acquired a specialized generator at a cost of ksh 8 million. The
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On 1st July 2009 MKU acquired a specialized generator at a cost of ksh 8 million. The depreciation policy of the university is relation to generator is 20% per year on reducing balance method. As a result of expansion the generator could not serve the university appropriately hence allocated to the library alone. Because of this an impairment review was conducted on 31st Dec 2011 and realized that:
i) The generator can be disposed at a selling price of ksh 4 M excluding a selling commission of ksh 0.5 M
ii) The assume generator could be used to generate cash flows of ksh 0.5 M per year for a period of 4 years. The approximated discount rate is 105 per year.
Related Book For
Financial Accounting and Reporting
ISBN: 978-1292162409
18th edition
Authors: Barry Elliott, Jamie Elliott
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