Section B Problem Solving Questions (90 marks)

Question 1 (25 marks)

(a)

The following trial balance extract relates to a property which is owned by Veeton as at 1 April 2019:

DR $000

Property at cost (20 year original life) 12,000 Accumulated depreciation as at 1 April 2019

CR $000

3,600

On 1 October 2019, following a sustained increase in property prices, Veeton revalued its property to $7.56 million.

Required:

(i) Calculate the total depreciation charge in Veetons statement of profit or loss for the year ended 31 March 2020, using straight-line depreciation method.

[4 marks]

(ii) On 1 October 2020, Veeton revalued its property to $7.55 million. Prepare the journal entry to record this revaluation, using the net method. [14 marks]

(b)

On 1 July 2020, Veeton purchased a new machine with a cost of $500,000 with a residual value of $8,000 and a useful life of 5 years. Veeton adopts cost model for machineries and uses diminishing balance method for depreciation, time apportioned in the years of acquisition and disposal.

Required:

(i) Compute the depreciation expense of this new machine for the year ended 31 March 2021. [4 marks]

(ii) On 1 April 2021, Veeton changed its depreciation method from diminishing balance method to straight-line method with residual value and useful life remain unchanged. Estimate the depreciation expense of this new machine for the year ended 31 March 2022. [3 marks]

Show all workings clearly.

Section - Problem Solving Or 90 mark The follow me on by Apl CE DR Property at 20 yarallel Accurat det. April 2012 On October 2010 sept. Vo Regled Calele tale che investors the year old 31 March 200 ml 1 October 2001 day 735 million July to medieval 14 Coty 303, Vespected as much with a cost of $300,000 ale of Sk. 000 and the life of years of discomodid for welding bed det he quind die Required Cemque defeat your On 1 April 2021, Velichamed is depreciation med from dig Nace eled teaghline with and welcome changed from the direction expert machinery ended 11 March 2011 She working wty Section - Problem Solving Or 90 mark The follow me on by Apl CE DR Property at 20 yarallel Accurat det. April 2012 On October 2010 sept. Vo Regled Calele tale che investors the year old 31 March 200 ml 1 October 2001 day 735 million July to medieval 14 Coty 303, Vespected as much with a cost of $300,000 ale of Sk. 000 and the life of years of discomodid for welding bed det he quind die Required Cemque defeat your On 1 April 2021, Velichamed is depreciation med from dig Nace eled teaghline with and welcome changed from the direction expert machinery ended 11 March 2011 She working wty Section B - Problem Solving Questions (90 marks) Question 1 (25 marks) The following trial balance extract relates to a property which is owned by Veeton as at 1 April 2019: DR CR $'000 S'000 Property at cost (20 year original life) 12,000 Accumulated depreciation as at 1 April 2019 3.600 On 1 October 2019, following a sustained increase in property prices, Veeton revalued its property to $7.56 million Required: (1) Calculate the total depreciation charge in Veeton's statement of profit or loss for the year ended 31 March 2020, using straight line depreciation method. (4 marks) (ii) On 1 October 2020, Veeton revalued its property to $7.55 million. Prepare the journal entry to record this revaluation, using the net method. [14 marks) (b) On 1 July 2020, Veeton purchased a new machine with a cost of $500,000 with a residual value of $8,000 and a useful life of 5 years. Veeton adopts cost model for machineries and uses diminishing balance method for depreciation, time apportioned in the years of acquisition and disposal. Required: (1) Compute the depreciation expense of this new machine for the year ended 31 March 2021. (4 marks) (ii) On 1 April 2021, Veeton changed its depreciation method from diminishing balance method to straight-line method with residual value and useful life remain unchanged. Estimate the depreciation expense of this new machine for the year ended 31 March 2022. [3 marks] Show all workings clearly. Section - Problem Solving Or 90 mark The follow me on by Apl CE DR Property at 20 yarallel Accurat det. April 2012 On October 2010 sept. Vo Regled Calele tale che investors the year old 31 March 200 ml 1 October 2001 day 735 million July to medieval 14 Coty 303, Vespected as much with a cost of $300,000 ale of Sk. 000 and the life of years of discomodid for welding bed det he quind die Required Cemque defeat your On 1 April 2021, Velichamed is depreciation med from dig Nace eled teaghline with and welcome changed from the direction expert machinery ended 11 March 2011 She working wty Section - Problem Solving Or 90 mark The follow me on by Apl CE DR Property at 20 yarallel Accurat det. April 2012 On October 2010 sept. Vo Regled Calele tale che investors the year old 31 March 200 ml 1 October 2001 day 735 million July to medieval 14 Coty 303, Vespected as much with a cost of $300,000 ale of Sk. 000 and the life of years of discomodid for welding bed det he quind die Required Cemque defeat your On 1 April 2021, Velichamed is depreciation med from dig Nace eled teaghline with and welcome changed from the direction expert machinery ended 11 March 2011 She working wty Section B - Problem Solving Questions (90 marks) Question 1 (25 marks) The following trial balance extract relates to a property which is owned by Veeton as at 1 April 2019: DR CR $'000 S'000 Property at cost (20 year original life) 12,000 Accumulated depreciation as at 1 April 2019 3.600 On 1 October 2019, following a sustained increase in property prices, Veeton revalued its property to $7.56 million Required: (1) Calculate the total depreciation charge in Veeton's statement of profit or loss for the year ended 31 March 2020, using straight line depreciation method. (4 marks) (ii) On 1 October 2020, Veeton revalued its property to $7.55 million. Prepare the journal entry to record this revaluation, using the net method. [14 marks) (b) On 1 July 2020, Veeton purchased a new machine with a cost of $500,000 with a residual value of $8,000 and a useful life of 5 years. Veeton adopts cost model for machineries and uses diminishing balance method for depreciation, time apportioned in the years of acquisition and disposal. Required: (1) Compute the depreciation expense of this new machine for the year ended 31 March 2021. (4 marks) (ii) On 1 April 2021, Veeton changed its depreciation method from diminishing balance method to straight-line method with residual value and useful life remain unchanged. Estimate the depreciation expense of this new machine for the year ended 31 March 2022. [3 marks] Show all workings clearly