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Salidou Ltd acquired all the shares of Chocolat Ltd on 1 July 2018. All the net...

Salidou Ltd acquired all the shares of Chocolat Ltd on 1 July 2018. All the net assets of Chocolat Ltd were at fair value at the date of acquisition except for an equipment, which was below its fair value. The remaining useful life of the equipment is 5 years. At 30 June 2023, depreciation expense will need to be debited.

True

False

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Expert Solution

Answer is true

The remaining 5 years of useful life of equipment will be covered from 1st July to 30th June 2023. For the year ended 30th Jun 2023 the asset will be having the 5th year of life. Hence depreciation expense will be calculated and charged to the income statement for the year ended 30th June 2023. So answer is true.

ekkarill92 answered 2 years ago
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