Illustrations of changes in accounting estimates, Financial Accounting

Illustrations of Changes in accounting estimates


B Ltd., bought an item of plant at a total cost of £100,000. The estimated useful life commencing from 1st January 2000 was 10 years.  At the start of the 4th year it was discovered that the actual estimated useful life of the plant was 8 years and not 10 years.

Required: Compute the depreciation charge for each of the eight years on the plant.

Initial depreciation         = 100,000

                                                       10

                                    =£10,000 each for 3 years

 

Net Book Value at beginning of year 4

= 10,000 x 3 years = 30,000

= 100,000 – 30,000 = 70,000

 

depreciation  for rest of the 5 years

= 70,000

        5

=£ 14,000

Posted Date: 12/12/2012 12:55:04 AM | Location : United States







Related Discussions:- Illustrations of changes in accounting estimates, Assignment Help, Ask Question on Illustrations of changes in accounting estimates, Get Answer, Expert's Help, Illustrations of changes in accounting estimates Discussions

Write discussion on Illustrations of changes in accounting estimates
Your posts are moderated
Related Questions
1. Select a publicly traded company (preferably manufacturing oriented; do not use a financial services company such as a bank or a bank holding company) and obtain a copy of their

Suppose that Oxford Inc. is interested in the two new products, AME and CGK. Because of its capital budget constraint, it can only launch one new product line. Eric just graduated

Distribution to a beneficiary Before distribution to a beneficiary, the investments will be re-valued and the profits or losses divided between the beneficiaries as follows:-

ARG Co presently has $50m of fixed assets and long-term debt of $10m. The issue of $3m of 9% debentures will raise fixed assets by $2m of buildings and machinery. There appears to

Ely purchased a patent (with a remaining legal life of ten years) from Backo on January 1, 2010 for $300,000. Ely expected to use the patent for five years. The carrying value on B

Dietz&Dow Industries (DDI) makes an unexpected takeover bid for Hein & Hillgen Instruments (HHI). DDI offers to pay $50 per share of HHI, which represents a 25% premium over the pr

Olivia has received a $15 gift certificate that is redeemable only for roasted peanuts. Bags of roasted peanuts come in two sizes, regular and jumbo. A regular bag contains 30 pean

XYZ Inc. whose stock is currently valued at $125/share with an implied volatility of 40% has debt of $80/share. a. Assuming a global recovery rate of 50% and a standard deviatio

Illustrations of Accounting Policies A Ltd., has decided to change its policy of writing off borrowing costs to capitalizing the same. As at 31st December, 2003, the company had

1. A fellow student says to you: "The statement of cash flows is the easiest of the basic financial statements to prepare because you know the answer before you start. You compare