Copy of SOL. MAN. Chapter 16 PPE (PART 2) IA PART 1B 2020ed PDF

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Chapter 16 Property, Plant and Equipment (Part 2)PROBLEM 1: TRUE OR FALSE1. FALSE – PAS 16 defines depreciation as the “systematicallocation of the depreciable amount of an asset over itsestimated useful life.”2. FALSE – revaluation model3. TRUE = (120K – 20K) ÷ 10 years = 10K annualdepreciation;10K...

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Page|1

Chapter 16 Property, Plant and Equipment (Part 2) PROBLEM 1: TRUE OR FALSE 1 . F ALS E–P AS16de fine sdepr e c i a t i ona st he“ s ys t e ma t i c al l oc a t i onoft hede pr ec i a bl ea mountofa na s s e toveri t s e s t i ma t e dus e f ull i f e . ” 2 . F ALS E–r e va l ua t i onmode l 3 . TRUE=( 1 2 0K–20 K)÷10ye a r s=10 Kannua l de pr e c i a t i on; 1 0 Kannua lde pr e c i a t i on÷10 0 Kde pr e c i a bl ea mount=10 %

PROBLEM 2: MULTIPLE CHOICE – THEORY 1. D 2. B 3. A F De pr e c i a t i ons t ar t swhent hea s s e ti sa va i l abl ef orus ei n t hema nneri nt e nde dbyma na ge me nt . F Cos t si nc ur r e dwhi l ea ni t e mc apa bl eofoper a t i ngi nt he manne ri nt e nde dbyma na ge me ntha sy e tt obebr ought i nt ous ea r er ec ogni z e dase x pe ns e s . 4. 5. 6. 7.

4 . F ALS E–8 00 K 5 . TRUE 6 . F ALS E 7 . TRUE 8 . TRUE 9 . F ALS E–r e c ogni z e di nOCIa ndac c umul a t e di ne qui t y 1 0 .F ALS E–( 18 0K–1 0K)–2 0 0K=3 0 Kl os s

D–s e et hewor d“ not ”i nt hepr obl e m D D D-P AS16enc our a ge st henot edi s c l os ur eoft hegr os s c a r r yi nga mount soff ul l yde pr e c i a t eda s s e t s .I ft hef ul l y de pr e c i a t e das s e t swe r er e mo ve df r om t hel edge r , i nf or ma t i onont hegr os sc a r r yi nga mount st obedi s c l os e d i nt henot e swoul dnotber e adi l ya va i l abl e .

8. B 9. D 10 .D

PROBLEM 3: EXERCISES 1 . So l ut i o ns : Re qui r e me nt( a) :St r ai ghtl i neme t hod I ni t i alc os t( Hi s t or i c alc os t )ofe qui pme nt Re s i dualva l ue De p r e c i a b l ea mo unt Di vi deby: Es t i ma t e dus e f ull i f e Annualde pr e c i at i on



De p r e c i a t i o nt a b l e : Dat e

De pr e c i at i on

Ac c umul at e dde pr e c i at i on

225, 000 225, 000 225, 000 225, 000 9 00, 0 00

22 5, 00 0 45 0, 00 0 67 5, 00 0 90 0, 00 0

J a n. 1, 2 0x 1 De c . 31 , 20 x1 De c . 31 , 20 x2 De c . 31 , 20 x3 De c . 31 , 20 x4



1, 000, 000 ( 100, 000) 9 00, 0 00 4 2 25, 0 00

Car r yi ngamount 1 , 000 , 000 7 75, 0 00 5 50, 0 00 3 25, 0 00 1 00, 0 00

J o ur na le nt r i e s : De c .31 ,20 x1 De c .31 ,20 x2

De pr e c i a t i one xpe ns e Ac c umul a t e dde pr e c i a t i on De pr e c i a t i one xpe ns e Ac c umul a t e dde pr e c i a t i on

2 25, 0 00 2 25, 0 00 2 25, 0 00 2 25, 0 00

Re qui r e me nt( b) :Sumof t he ye ar s ’di g i t sme t hod S YDde nomi na t or=Li f ex[ ( Li f e+1 )÷2] S YDde nomi na t or=4x[ ( 4+1 )÷2 ]=1 0



De p r e c i a t i o nt a b l e : Dat e

De pr e c i abl e

SYD

De pr e c i at i on

Ac c umul at e d

Car r yi ng

Page|2 amount 1 / 1 / x 1 1 2/ 31 / x 1 1 2/ 31 / x 2 1 2/ 31 / x 3 1 2/ 31 / x 4



r at e

900, 000 900, 000 900, 000 900, 000

4/10 3/10 2/10 1/10

de pr e c i at i on

3 60, 0 00 2 70, 0 00 1 80, 0 00 9 0, 00 0 9 00, 0 00

amount

1, 00 0, 00 0 6 40, 0 00 3 70, 0 00 1 90, 0 00 1 00, 0 00

3 60, 0 00 6 30, 0 00 8 10, 0 00 9 00, 0 00

J o ur na le nt r i e s : De c .31 ,20 x1

3 60, 0 00

De pr e c i a t i one xpe ns e Ac c umul a t e dde pr e c i a t i on De pr e c i a t i one xpe ns e Ac c umul a t e dde pr e c i a t i on

De c .31 ,20 x2

3 60, 0 00 2 70, 0 00 2 70, 0 00

Re qui r e me nt( c ) :Doubl ede c l i ni ngbal anc eme t hod Doubl ede c l i ni ngr a t e=2÷Li f e Doubl ede c l i ni ngr a t e=2÷4=5 0% Ye ar 2 0x1 2 0x2 2 0x3 2 0x4



De pr e c i at i on 5 00, 0 00 2 50, 0 00 1 25, 0 00 25, 000

( 1M x5 0%) ( 1M –5 00 K)x50 % ( 1M –5 00 K–2 50 K)x50 % ( 1M –5 00 K–2 50 K–12 5K– 10 0KRV)

De p r e c i a t i o nt a b l e : Dat e

De pr e c i at i on

Ac c umul at e dde pr e c i at i on 1, 000, 000

J a n. 1, 20 x1

5 00, 0 00 2 50, 0 00 1 25, 0 00 2 5, 00 0 90 0, 00 0

De c .31 ,20 x1 De c .31 ,20 x2 De c .31 ,20 x3 De c .31 ,20 x4



Car r yi ngamount

500 , 000 750 , 000 875 , 000 900, 000

5 00, 0 00 2 50, 0 00 1 25, 0 00 10 0, 00 0

J o ur na le nt r i e s : De c .31 ,20 x1 De c .31 ,20 x2

5 00, 0 00

De pr e c i a t i one xpe ns e Ac c umul a t e dde pr e c i a t i on De pr e c i a t i one xpe ns e Ac c umul a t e dde pr e c i a t i on

5 00, 0 00 2 50, 0 00 2 50, 0 00

2 . So l ut i o ns : Re qui r e me nt( a) :Bas e donI nput De pr e c i a t i onr a t e=De pr e c i a bl eamount÷Es t i ma t e dt ot alhour s

De pr e c i a t i onr a t e =90 0 , 0 0 0÷1 2, 0 00 De pr e c i a t i onr a t e =75pe rhourofi nput De c .31 ,20x 1 De c .31 ,20x 2

2 70, 0 00

De pr e c i a t i one xpe ns e(3, 600x75 ) Ac c umul a t e dde pr e c i a t i on De pr e c i a t i one xpe ns e(3, 000x75 ) Ac c umul a t e dde pr e c i a t i on

2 70, 0 00 2 25, 0 00 2 25, 0 00

Re qui r e me nt( a) :Bas e donOut put De pr e c i a t i onr a t e=De pr e c i a bl eamount÷Es t i ma t e dt ot aluni t s

De pr e c i a t i onr a t e =( 9 0 0 , 00 0÷7 2 0, 0 00 ) De pr e c i a t i onr a t e =1. 2 5pe runi tofout put De c .3 1,2 0 x 1 De c .3 1,2 0 x 2

De pr e c i a t i one xpe ns e(240Kx1. 2 5) Ac c umul a t e dde pr e c i a t i on De pr e c i a t i one xpe ns e(200Kx1. 2 5) Ac c umul a t e dde pr e c i a t i on

3 00, 0 00 3 00, 0 00 2 50, 0 00 2 50, 0 00

3 . So l ut i o n: Yr . 1 2 3 4

St r ai ghtl i ne ( 75 , 0 00 */4)=18 , 75 0 18 , 7 50 18 , 7 50 18 , 7 50

*8 0 , 0 00-5 , 0 0 0=7 5 , 0 00de pr e c i a bl ea mount

SYD 4 /1 0x7 5 , 0 0 0*=3 0 , 00 0 3 /1 0x7 5, 0 0 0=2 2 , 5 0 0 2 /1 0x7 5, 0 0 0=1 5 , 0 0 0 1 /1 0x7 5, 0 0 0=7 , 5 0 0

Doubl edec l i ni ngba l a nc e 5 0% x80 , 00 0=4 0, 00 0 50 % x40 , 0 00=2 0, 00 0 50 % x20 , 0 00=1 0, 00 0 5 0% x10 , 00 0=5 , 00 0

Page|3 Ye ar

2 0x 2

St r ai ghtl i ne 18 , 75 0x9/12 =14 , 0 62 . 50 18 , 75 0

2 0x 3

18 , 75 0

2 0x 4

18 , 75 0

2 0x 5

18 , 75 0x3/12 =4, 68 7. 50

2 0x 1

SYD

Doubl edec l i ni ngba l a nc e 3 0, 00 0x9/1 2=22 , 5 00

4 0, 00 0x9/12=3 0, 00 0

30 , 0 00x3/12=7 , 5 00 2 2, 50 0x9/1 2=16 , 8 75 22 , 50 0x3/12=5 , 62 5 1 5, 00 0x9/12=1 1, 25 0 15 , 0 00x3/12=3 , 7 50 7 , 5 00x9/12=5, 6 25

4 0, 00 0x3/1 2=10 , 0 00 2 0, 00 0x9/12=1 5, 00 0 2 0, 00 0x3/12=5 , 00 0 10 , 00 0x9/12=7 , 50 0 1 0, 00 0x3/12=2 , 50 0 5 , 0 00x9/12=3, 7 50

7 , 50 0x3/12=1 , 8 75

5 , 0 00x3/12=1 , 25 0

Thea s s e ti sa c qui r e donMa r .1 8,2 0 x1( l a s tha l foft hemont h) .Ac c o r di ngl y ,i ti sde pr e c i a t e ds t a r t i ngonApr .1,2 0 x1 .

4 . So l ut i o n: St e p1 :Car r yi ngamountasa tt hebe g.oft hepe r i odofc ha nge 20 % 2 0, 48 0, 00 0

Doubl ede c l i ni ngbal a nc er a t e(2÷Li f e )or( 2÷1 0yr s . ) Car r yi ngamt .onJ an.1, 20x4( 4 0M x8 0% x8 0 % x8 0 %)

 

St e p2 :Appl yt hec hange s Car r yi ngamountonJ an. 1, 20x4 Re s i dualva l ue De p r e c i a b l ea mo unt Di vi deby:Re vi s e dr e mai ni ngus e f ull i f e(12yrs.–3yrs. ) St r ai ghtl i nede pr e c i at i on

2 0, 48 0, 00 0 ( 2, 000, 0 00) 1 8, 48 0, 00 0 9 2 , 053 , 333

J o ur na le nt r y: De c .3 1 ,2 0 x 4

2 , 053 , 333

De pr e c i a t i one xpe ns e Ac c umul a t e dde pr e c i a t i on

2 , 053 , 333

5 . So l ut i o ns : Re qui r e me nt( a) : Re pl a c e me ntc os t Le s s : De pr e c i a t i on( 2 1M x20 /60(a)) Fai rval ue Car r yi ngamount( 1 0M –5 M) Re val uat i ons ur pl us–gr os soft ax Le s s :De f e r r e dt ax( 9M x30 %) Re val uat i ons ur pl us–ne toft ax

21, 0 00, 0 00 ( 7, 00 0, 00 0) 14, 0 00, 0 00 ( 5, 00 0, 00 0) 9, 0 00, 0 00 ( 2, 700, 0 00) 6 , 300 , 000

( a)

T ot a le c onomi cl i f e=Effe c t i vel i f e+Re ma i ni nge c onomi cl i f e( 2 0+4 0=60 )

Re qui r e me nt( b) :



Pr o p o r t i o na lme t ho d

Bui l di ng Ac c um.de pr e c i a t i on CA/DRC/RS(a)

Hi s t or i c alCos t 1 0, 00 0, 00 0 ( 5, 00 0 , 00 0) 5, 00 0, 00 0

Repl ac eme ntc os t 2 1, 00 0, 00 0 ( 7, 00 0 , 00 0)

I nc r e as e 11 , 0 00 , 0 00 ( 2, 00 0 , 00 0)

1 4, 00 0, 00 0

9, 00 0 , 00 0

a ) (

Ca r r yi nga mount /De pr e c i a t e dr e pl a c e me ntc os t /Re va l ua t i ons ur pl us–gr os soft a x Da t e



Bui l di ng Ac c umul a t e dde pr e c i a t i on Re va l ua t i ons ur pl us De f e r r e dt axl i abi l i t y

1 1, 00 0, 00 0 2, 0 00, 0 00 6 , 300 , 000 2, 7 00, 0 00

El i mi na t i o nme t ho d Da t e

Ac c umul a t e dde pr e c i a t i on(el i mi nat i on) Bui l di ng(balanci ngfig ur e ) Re val ua t i ons ur pl us De f e r r e dt axl i abi l i t y

5 , 000 , 000 4 , 000 , 000 6 , 300 , 000 2, 7 00, 0 00

Page|4 Thebui l di ng’ sc a r r yi nga mounta f t e rt her e va l ua t i oni sa na l yz eda sf ol l o ws : Pr opor t i ona l 2 1, 00 0, 00 0 ( 7, 00 0 , 00 0) 14 , 00 0, 00 0

Bui l di ng( 10 M +11 M) ;( 10 M +4M) A/D ( 5M +2M) ; ( 5M -5 M) Ca r r yi nga mo unt( e q ua lt of a i rva l ue )

El i mi na t i on 1 4, 00 0, 00 0 1 4, 00 0 , 00 0

Re qui r e me nt( c ) : Fai rval ue Re s i dualval ue De pr e c i a bl eamount Di vi deby: Re vi s e dannualde pr e c i at i on

1 4, 00 0, 00 0 1 4, 00 0, 00 0 4 0 3 50, 0 00

6 . So l ut i o ns : Re qui r e me nt( a) : Fa i rval ue Le s s :Car r yi nga mount( 40 M –1 0M) Re val uat i ons ur pl us-gr os soft ax Le s s :De f e r r e dt ax( 18 M x3 0%) Re val uat i ons ur pl us-ne toft ax

48, 0 00, 0 00 ( 30, 000, 000) 1 8, 00 0, 00 0 ( 5, 40 0, 00 0) 1 2, 60 0, 00 0

Re qui r e me nt( b) :  Pr o p o r t i o na lme t ho d Bui l di ng Ac c um.de pr e c i a t i on Ca r r yi nga mo unt

Hi s t or i c alCos t 40 , 0 00 , 00 0 ( 10 , 0 00 , 0 00 ) 3 0, 00 0, 00 0

Fa i rval ue

%c hange

48 , 0 00 , 00 0

16 0%*

*( 4 8 , 0 0 0, 0 0 0÷3 0 , 0 0 0, 0 0 0 )=16 0 %i nc r e a s e

Bui l di ng Ac c um.de pr e c i a t i on Ca r r yi nga mo unt Da t e

Hi s t or i c alCos t 4 0, 00 0, 00 0 ( 10 , 0 00 , 00 0) 3 0, 00 0, 00 0

%c hange 16 0% 1 60 %

Reva l uedamount s 6 4 , 00 0, 00 0 ( 1 6, 00 0, 00 0) 48 , 0 00 , 0 00

2 4, 00 0, 00 0

Bui l di ng( 6 4M –4 0M) Ac c um. de pr e c i a t i on( 1 6M –10 M) De f e r r e dt axl i a bi l i t y Re val ua t i ons ur pl us

6 , 000 , 000 5 , 400 , 000 1 2, 60 0, 00 0

Re qui r e me nt( b) :El i mi nat i onme t hod Da t e

Ac c umul a t e dde pr e c i a t i on( e l i mi nat i on) Bui l di ng(balanci ngfig ur e ) De f e r r e dt axl i abi l i t y Re val ua t i ons ur pl us

1 0, 00 0, 00 0 8 , 000 , 000 5 , 400 , 000 1 2, 60 0, 00 0

Thebui l di ng’ sc a r r yi nga mounta f t e rt her e va l ua t i oni sa na l yz eda sf ol l o ws : Bui l di ng( 40 M +24 M) ;( 40 M +8M) Ac c um.Depr e c i a t i on( 1 0M +6 M) ;( 10 M -1 0M) Ca r r yi nga mo unt( e q ua lt of a i rva l ue )

PROBLEM 4: MULTIPLE CHOICE – COMPUTATIONAL 1 . D  SLM =( 1M x9 5%)÷10=95 , 0 0 0  SYD de nomi na t or={ 10x[ ( 1 0+1 )÷2 ] }=5 5 S YD de pr e c i a t i oni n2 0 x2=9 50 , 00 0x9/5 5=15 5 , 4 55  DDBr a t e=2÷10=20 % DDBde pr e c i a t i oni n2 0 x2=1M x8 0% x2 0% =1 60 , 00 0  UOPM ( i nput )de pr e c i a t i oni n20 x 2=9 50 , 00 0x( 2 , 8 0 0 /28 , 00 0 )=9 5, 0 00  UOPM ( out put )de pr ec i a t i oni n20 x2=9 50 , 00 0x( 9 , 80 0 /8 4 , 0 00 )=1 1 0, 8 33 2 . C

Pr opor t i ona l 6 4, 00 0, 00 0 ( 16 , 0 00 , 00 0) 48 , 00 0, 00 0

El i mi na t i on 4 8, 00 0, 00 0 48 , 0 00 , 0 00

Page|5 Pur c ha s epr i c e Commi s s i on Fr e i ght I ns t a l l a t i onandt e s t i ng T o t a lc o s t Re s i dualva l ue De p r e c i a b l ea mo unt  

  

4 80 , 00 0 2 0, 0 00 2 2, 0 00 18 , 00 0 5 40 , 00 0 ( 4 0 , 0 0 0) 50 0, 0 00

SLM =5 00 , 00 0x8/1 0+40 , 00 0=4 40 , 00 0 SYD de nomi na t or={ 10x[ ( 1 0+1 )÷2 ] }=5 5 S YD a c c umul a t e dde pr e c i a t i ononDe c .3 1 ,2 0x 2=5 0 0 , 0 00x[ ( 1 0+9 )÷5 5]=17 2 , 7 27 S YD c a r r yi nga mountonDe c .3 1 ,20 x2=5 4 0, 0 00-1 72 , 72 7=3 6 7, 2 73 DDBr a t e=2÷10=20 % DDBc a r r yi nga mountonDe c .3 1, 20 x2=5 40 M x8 0% x8 0% =3 45 , 60 0 UOPM ( i nput )Ac c umul a t e dde pr e c i a t i ononDe c .31 ,2 0x2=5 0 0 , 0 0 0x[ ( 2 , 00 0+2 , 70 0)÷25 , 00 0 ]=9 4 , 00 0 Ca r r yi nga mountonDe c .3 1,20 x 2=5 40 , 00 0–94 , 00 0=4 46 , 00 0 UOPM ( out put )Ac c umul a t e dde pr e c i a t i ononDec .3 1 ,2 0x 2=5 00 , 00 0x[ ( 8 , 0 00+10 , 00 0)÷1 0 0, 0 00 ]=90 , 00 0 Ca r r yi nga mountonDe c .3 1,20 x 2=5 40 , 00 0–90 , 00 0=4 50 , 00 0

3 . C So l ut i o n: S YD de nomi na t or=Li f ex[ ( Li f e+1 )/2 ]=4x[ ( 4 +1 )/2 ]=1 0 Hi s t or i c a lc os t Es t i ma t e dr e s i dualval ue Depr e c i a bl eamount

20 , 00 0 ( 2 , 00 0 ) 1 8, 0 00

Depr e c i a t i on-2 0 x1( 1 8 , 0 0 0x4 /1 0 ) Depr e c i a t i on-2 0 x2( 1 8 , 0 0 0x3 /1 0 ) Depr e c i a t i on-2 0 x2( 1 8 , 0 0 0x2 /1 0 ) Ac c umul a t e dde pr e c i a t i on-12 /3 1/2 0 x3

7 , 2 0 0 5 , 4 0 0 3 , 6 0 0 16 , 20 0

Hi s t or i c a lc os t Ac c umul a t e dde pr e c i a t i on-12 /3 1/2 0 x3 Car r yi ngamount-1 2 /31 /2 0 x3

20 , 00 0 ( 16 , 20 0 ) 3 , 8 00

4 . B Yr . 1 2 3

St r ai ghtl i ne ( 100 , 000–10, 0 00)÷5=18, 000 1 8, 00 0 1 8, 00 0

4 5

1 8, 00 0 1 8, 00 0

SYD 9 0, 00 0x5/15=30 , 000 9 0, 00 0x4/15=24 , 000 9 0, 00 0x3/ 1 5=1 8, 00 0 9 0, 00 0x2/15=12 , 000 9 0, 00 0x1/15=6, 000

5 . A( 11 0 , 0 0 0–5 , 00 0 )÷10yr s .=10 , 50 0 6 . A So l ut i o n: 1 50% dec l i ni ngbal a nc er a t e=1 . 5/Li f e=1. 5 /5=30 % De pr e c i a t i on-20x1( 20 0, 00 0x3 0%) De pr e c i a t i on-20x2( 20 0, 00 0-6 0, 00 0)x30 % Ac c umul at e dde pr e c i at i on-12/ 3 1/ x2

7 . D So l ut i o n:  Compos i t el i f e=De pr e c i a bl eamount÷Annualde pr e c i a t i on Co mp o s i t el i f e=2 8 0, 0 00÷70 , 00 0=4ye ar s

60, 0 00 42, 0 00 102 , 000

Page|6  Compos i t er at e=Annualde pr e c i a t i on÷T ot a lc os t Co mp o s i t er a t e=7 0, 0 00÷29 0, 0 00=24 . 14 %



De pr e c i at i oni nc ur r e ntye ar :

Tot a lde pr e c i abl eamount De pr e c i a bl eamountofol dt ool s De pr e c i a bl eamountofne wt ool s Re vi s e dde p r e c i a b l ea mo unt Di vi deby:Or i gi nalc ompos i t el i f e Re vi s e dannualde pr e c i at i on

2 80, 0 00 ( 8 , 000 ) 1 2, 00 0 2 84, 0 00 4 7 1, 00 0

Tot alc os t Cos tofol dt ool s Cos tofne wt ool s Re vi s e dt o t a lc o s t Mul t i pl yby:Or i gi na lc ompos i t er a t e Re vi s e dannualde pr e c i at i on

2 90, 0 00 ( 8 , 000 ) 1 2, 00 0 2 94, 0 00 2 4. 14 % 7 0, 97 2*

*Ans we rr o und e d o fft o7 1 , 00 0 .

8 . C So l ut i o ns :  Re t i r e me ntme t ho d : Cos tofdi s pos al s( 12 , 0 0 0+2 4 , 00 0+3 6 , 0 0 0 ) Ne tdi s pos alpr oc ee ds(1, 0 00+1 , 60 0+2, 0 0 0 ) De pr e c i at i one x pe ns e



72, 0 00 ( 4, 600) 6 7, 40 0

Re pl a c e me ntme t ho d :

Cos tofaddi t i onsasr e pl ac e me nt s(20, 00 0+4 4 , 0 00 ) Cos tofdi s pos al sbutnotr e pl ac e d Pr oc e e dsf r om s al eofol dt ool s( 1, 0 0 0+1 , 6 00+2 , 00 0 ) De pr e c i at i one x pe ns e



6 4, 000 2 4, 00 0 ( 4, 600) 8 3, 40 0

I nv e nt o r yme t h o d:

be g.bal . Addi t i ons

Tool s 3 00, 0 00 1 2 4, 00 0

4 , 600 Pr oc e e dsf r om as s e tdi s pos al s 67, 4 00 De pr e c i at i on( s que e ze ) 3 52, 0 00 e nd. ba l . ( pe rphys i c alc ount )

9 . C  Us e f ull i f e=20ye a r s  Re ma i ni ngl e a s et er m asof1 2 /31 /0 1=( 9 *+5r e ne wal )=1 4 *De c .3 1 , 2 0 01c o mpl e t i onda t eofi mpr ove me nt st oDe c .3 1 , 2 0 10e ndofor i gi nall e a s et e r m =9yr s .

 

Shor t e r=14ye ar s 4 8 0, 0 00x1 3/14=4 4 5, 7 14

1 0 .C So l ut i o n: St e p1 :Car r yi ngamountasa tt hebe g.oft hepe r i odofc ha nge  

10 %

Doubl ede c l i ni ngbal a nc er a t e(2÷Li f e )or( 2÷2 0yr s . ) Car r yi ngamt .onJ an.1, 20x8

2 , 391 , 485

( 5M x9 0 % x9 0 % x9 0 % x9 0 % x9 0 % x9 0 % x90 %)

St e p2 :Appl yt hec hange s  Re ma i ni ngl i f e=2 0yr s .–7yr s .=1 3y e a r s  S YD de nomi na t or={ 13x[ ( 1 3+1 )÷2 ] }=91 

Car r yi ngamountonJ an. 1, 20x8 Re vi s e dr e s i dualval ue( 200 , 000–2 0, 00 0) De pr e c i a bl ea mount Mul t i pl yby: SYDde pr e c i at i oni n20x8

2 , 3 91, 4 85 ( 180 , 000 ) 2 , 211 , 485 1 3/91 315, 926

1 1 .D Hi s t or i c alc os t Or i gi na le s t i ma t e dus e f ull i f e Or i gi na lde pr e c i a t i o npe ry e a r Hi s t or i c alc os t

264 , 000 8 3 3, 00 0 264 , 000

Page|7 Ac c umul a t e dde pr e c i a t i on-1/1/x3( 3 3, 00 0x3yr s . ) Car r yi ngamount-1/1/x3 Re vi s e dr e s i dualval ue Re vi s e dde pr e c i a bl eamount Di vi deby:Re vi s e dus e f ull i f e( 6yr s .-3yr s . ) De pr e c i a t i on-20x3

( 9 9, 00 0) 165 , 000 ( 2 4, 00 0) 141 , 000 3 4 7, 00 0

Ac c umul a t e dde pr e c i a t i on-1/1/x3( 3 3, 00 0x3yr s . ) De pr e c i a t i on-20x3 Ac c umul at e dde pr e c i at i on-12/ 3 1/ x3

99, 0 00 4 7, 00 0 146 , 000

1 2 .C So l ut i o ns : ( 1 ) J a n.1 ,2 0 x 7

1 00, 0 00 6 00, 0 00 1 , 100 , 000

Cas h Ac c umul a t e dde pr e c i a t i on(1. 8 M x5 /15 ) Los sonr epl ac ement( s que e z e ) Equi pme nt(ol dpa r t )

1 , 800 , 000

t od e r e c o g ni z et heo l dp a r t J a n.1 ,2 0 x 7

2 , 100 , 000

Equi pme nt(new part) Ca s h

2 , 100 , 000

t or e c o g ni z et hene wr e pl a c e me ntpa r t

Onde r e c ogni t i on,t hedi ffe r e nc ebe t we e nt hec ar r yi ngamountoft hede r e c ogni ze dPPEandt hene tdi s pos alpr oc e e ds , i fa ny , i s r e c ogni z e da sg ai norl os si npr ofitorl os s . ( 2 ) J a n.1 ,2 0 x 7

Cas h Ac c umul a t e dde pr e c i a t i on(2. 1 M x5 /15 ) Los sonr epl ac ement( s que e z e ) Equi pme nt(ol dpa r t )

1 00, 0 00 7 00, 0 00 1 , 300 , 000 2 , 100 , 000

t od e r e c o g ni z et h eo l dp a r t J a n.1 ,2 0 x 7

Equi pme nt(new part) Ca s h

2 , 100 , 000 2 , 100 , 000

t or e c o g ni z et hene wr e pl a c e me ntpa r t

1 3 .A So l ut i o n: ( 1 ) Re pl a c e me ntc os t ( b) Le s s :De pr e c i a t i on( 5 0M x8(a)/32 ) Fai rval ue( De pr e c i at e dr e pl ac e me ntc os t ) Le s s :Car r yi nga mount(40, 0 0 0, 0 0 0–16 , 0 0 0 , 00 0 ) Re val uat i ons ur pl us , gr os soft ax Le s s :De f e r r e dt axc ons e que nc e(13. 5 M x3 0 %) Re val uat i ons ur pl us , ne toft ax

50, 000, 000 ( 12, 500, 000) 3 7, 50 0, 00 0 ( 24, 000, 000) 13 , 500 , 000 ( 4, 050, 0 00) 9 , 450 , 000

( a)

Effe c t i v el i f e( Effe c t i vea g e ) T o t a le c o no mi cl i f e=Effe c t ...