Property, Plan and Equipment, Financial Accounting

Assignment Help:
Hi!

Here are the case:

Acquisition of Assets:
The cost method of accounting is used for the initial recording of all acquisitions of assets controlled by the authority. Cost is determined as the fair value of the assets given as consideration plus costs incidental to the acquisition, including architects’ fees and engineering design fees and all other costs incurred in getting the assets ready for use.

Property, plant and equipment:
All items of property, plant and equipment with a cost, or other value, in excess of $3,000 are recognised in the year of acquisition. All other such items with a cost, or other value, less than $3,000 are charged as an expense.

Items or components which form an integral part of an asset are recognised as a single asset (functional asset). The recognition threshold is applied to the aggregate cost of each functional asset.

The cost of replacing the ‘B55’ fire appliance photographed on the front cover of the latest annual report with a unit of the same or similar capability is estimated to be $260,000, including fitting costs to convert the standard vehicle to a fire fighting unit of $70,000.

A spare set of tyres for the ‘B55’ appliance is obtainable at a current cost to the CFRA of approximately $5,000. Fitting costs are typically included in the overall cost of a new set of tyres. Tyres are typically replaced on these units every twelve (12) months.


---the question:


1. Assuming the CFRA acquired a replacement fire appliance for the ‘B55’ during the last financial year, state the cost of acquisition on the basis of the information supplied.
(This has to be relate to AASB 116)

Related Discussions:- Property, Plan and Equipment

Proposed dividends by subsidiary company, Proposed dividends by subsidiary ...

Proposed dividends by subsidiary company If the subsidiary company has proposed some dividends appearing under current liabilities then the dividends are payable to the holding c

Discount rate to the estimated npv of the investment, Q. Discount rate to t...

Q. Discount rate to the estimated NPV of the investment? There is no necessity to round the solution up to the nearest whole percentage. NPV approximate may be made using the e

Illustration of double entry-branches, Illustration of double entry The ba...

Illustration of double entry The balances on the current accounts of a head office and branch were Ksh 698,000, before the transactions listed below: Normal 0

What is accounting and book keeping, Question 1 What is accounting and boo...

Question 1 What is accounting and book keeping? Explain the objectives of accounting? Question 2 Explain GAAP and write down the relationship between accounting principles, a

Adjustment, A company does not need to record the receipt of a bill for uti...

A company does not need to record the receipt of a bill for utilities used during this year if they will not pay for it until next year. True or False

Secured creditors-bankruptcy and liquidation, SECURED CREDITORS A secur...

SECURED CREDITORS A secured creditor may: Rely on his security and not prove at all. Surrender his security and prove for the full amount of the debt. Realise his s

Prepare partial income statement through fifo and lifo , Prepare Partial In...

Prepare Partial Income Statement through FIFO, And LIFO Methods The records of XYZ Restaurant Supply include the following accounts for cases of coffee cups at December 31 of t

Uncertainty of cash flows, Individuals commonly prefer possession of cash i...

Individuals commonly prefer possession of cash immediately or in the present moment quite than the same amount at any time in the future. Such time preference is fundamentally due

Cumulative and substitutional legacies and devises, Cumulative and substitu...

Cumulative and substitutional legacies and devises Where a will makes two gifts of unequal amounts to the same person, they are assumed, in the absence of a contrary indication

Provision for bad debts, A business had always made a provision for doubtfu...

A business had always made a provision for doubtful debts at the rate of 5% of debtors. On 1 January 2017 the provision for doubtful debts brought forward from the previous year wa

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd