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
As a recently hired accountant for a small business, Bearing, Inc., you are provided with last year's balance sheet, income statement, and post-closing trial balance to familiarize

DISCLAIMER OF ONEROUS PROPERTY 1) Effect of disclaimer The trustee may disclaim onerous property consisting of: Land burdened with onerous covenants; Stocks and shares;

Order Point Formula The analysis discussed above tends to be somewhat cumbersome when probability distributions are most complex and dependent and multi-period cases are involv

REA diagram for (1) PEGASUS PAPER PRODUCTS and (2)PIECES BOUTIQUE

Suppose the consumer is at coffee shop 1. Coffee shop 1 charges $2.00 per cup. - Draw and label the demand curve for a cup of coffee for the consumer (please do not forget to sp

Are revenue and expense accounts permanent accounts and should not be closed at the end of the accounting period?

Holding company with a subsidiary and a sub-subsidiary Where the subsidiary company has another subsidiary company, then that subsidiary is referred to as a sub-subsidiary compan

Determine the term- Understandability Accounting reports must be expressed as clearly as possible and must be understood by those at whom the information is aimed.

A new shopping mall is considering setting up an information desk staffed by one (1) employee. Based upon information obtained from similar information desks, it is believed that p