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Mann Limited purchased machinery on 1 January 20.9, on which date it was estimated to have a useful life of 5 years and a nil residual value. The carrying amount on 31 December 20.10 was:
Cost (1/1/20.9) R500 000
Accumulated depreciation R200 000
Net carrying amount (31/12/2010) R300 000
On the 1/1/20.11, the remaining economic useful life was estimated to be 2 years.
REQUIRED
Disclose the change in estimate using the re-allocation method.
Disclose the change in estimate using the cumulative catch-up method.
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