Reference no: EM132789322

Questions -

Q1. Stevenson ltd has the following items in inventory:

ALFA items at the cost of £14,000: their selling price is £15,000 but they require packaging before it can be sold, and this cost is estimated at 20% of the selling price.

BETA items at the cost of £15,000; the selling price is £20,000 and will be sold at a discount of 30% after the year-end.

Compute the overall (ALFA+ BETA) value of the inventory?

Q2. A right-of-use asset acquired under a lease is measured at which mount according to IFRS 16 Leases?

a. lease liability - initial direct costs + estimated costs of dismantling - incentives received

b. lease liability + initial direct costs + estimated costs of dismantling + incentives received

c. lease liability + initial direct costs + estimated costs of dismantling - incentives received

d. lease liability - initial direct costs - estimated costs of dismantling + incentives received

Q3. A plant was acquired for £450,000 with estimated useful economic life of 15 years and residual value of £30,000. It is depreciated using straight -line method.

At the beginning of year 7, it is estimated that remaining economic useful life is the only 7 years with residual value of £15,000. Estimated value in use is £ 225,000 and net realisable value is £ 245,000.

What is the amount to be written off as impairment in Income Statement at the beginning of the year seven and annual depreciation over remaining useful life?